If managers are making decisions to maximize shareholder wealth,they are primarily making decisions that:
A)maximize sales revenue.
B)minimize risk.
C)maximization of the market value of shareholders' common stock.
D)reduce the costs of borrowing.

Question

Quizplus · Accepted Answer

Maximizing shareholder wealth typically involves maximizing the market value of shareholders' common stock. This goal is achieved by making decisions that increase the profitability and financial health of the company, as reflected in its financial statements and stock price. While minimizing risk and reducing borrowing costs may contribute to this goal, they may not necessarily be the primary focus of managers seeking to maximize shareholder wealth. Maximizing sales revenue may also be a means of achieving this goal but must be balanced against other considerations such as profitability and long-term sustainability.

If Managers Are Making Decisions to Maximize Shareholder Wealth,they Are