The key variables in the owner wealth maximization process are ________.
A) market risk premium and risk
B) cash flows and risk
C) risk-free rate and share price
D) total assets and risk

Question

Quizplus · Accepted Answer

The key variables in the owner wealth maximization process are the cash flows generated by the company and the associated risk. Maximizing cash flows while managing risk is essential for maximizing the value of the firm for its owners. The other options, such as market risk premium, risk-free rate, share price, and total assets, may be relevant factors in financial analysis, but they are not the key variables in the owner wealth maximization process.

The Key Variables in the Owner Wealth Maximization Process Are