Which of the following goals of the firm are synonymous (equivalent)to the maximization of shareholder wealth?
A) profit maximization
B) risk minimization
C) maximization of the total market value of the firm's common stock
D) none of the above

Question

Quizplus · Accepted Answer

Maximization of the total market value of the firm's common stock is equivalent to maximizing shareholder wealth as it directly benefits the shareholders by increasing the value of their investments. Profit maximization may not necessarily result in an increase in stock value and risk minimization may not always result in maximizing shareholder wealth.

Which of the Following Goals of the Firm Are Synonymous