The main objective of corporate management is to
A)behave in a socially responsible manner.
B)minimize the value of all outstanding liabilities.
C)maximize the value of the firm.
D)Both A and B are true since minimizing outstanding liabilities maximizes firm value.

Question

Quizplus · Accepted Answer

The main objective of corporate management is to maximize the value of the firm. While it is important to behave in a socially responsible manner, this is typically viewed as a secondary objective. Minimizing the value of outstanding liabilities may actually decrease the value of the firm, so option B is not accurate. The main objective of corporate management is to maximize the value of the firm, by increasing profits, maximizing efficiency, and providing value to shareholders. While social responsibility is an important consideration for many companies, the primary objective of management is to increase shareholder value. Minimizing outstanding liabilities may be one strategy to help maximize firm value, but it is not the primary objective of corporate management.

The Main Objective of Corporate Management Is to