The primary goal of a publicly-owned firm interested in serving its stockholders should be to _____.
A)minimize the debt used by a firm
B)maximize expected earnings per share (EPS)
C)minimize the chances of losses
D)maximize the stock price per share
E)maximize expected net income

Question

The primary goal of a publicly-owned firm interested in serving its stockholders should be to _____. 
A)minimize the debt used by a firm
B)maximize expected earnings per share (EPS)
C)minimize the chances of losses
D)maximize the stock price per share
E)maximize expected net income

Quizplus · Accepted Answer

The primary goal of a publicly-owned firm interested in serving its stockholders should be to maximize the stock price per share. This is because an increase in stock price will result in an increase in the wealth of the stockholders, which is the ultimate goal of the firm. Maximizing the expected earnings per share or net income may be important, but they are not the primary goal as they do not necessarily result in an increase in stock price. Minimizing the debt used by a firm and minimizing the chances of losses are important, but they are not the primary goal as they do not directly relate to the wealth of the stockholders.

The Primary Goal of a Publicly-Owned Firm Interested in Serving