The best way to maximize the intrinsic value of a company and thus shareholders' wealth is to maximize its earnings per share.

Question

Quizplus · Accepted Answer

Maximizing earnings per share may not always result in maximizing intrinsic value or shareholders' wealth. Other factors such as cash flows, growth opportunities, risk management, and corporate governance also play significant roles in determining the overall value of a company. A short-term focus on earnings per share may lead to sacrificing long-term growth and sustainability.

The Best Way to Maximize the Intrinsic Value of a Company