Wealth maximization as the goal of the firm implies enhancing the wealth of
A) the Board of Directors.
B) the firm's employees.
C) the federal government.
D) the firm's stockholders.

Question

Quizplus · Accepted Answer

Wealth maximization as the goal of the firm implies enhancing the wealth of the firm's stockholders. This is because the stockholders are the owners of the firm and invest their money in the firm with the expectation of earning a return on their investment. Therefore, the primary objective of the firm should be to maximize the value of the stockholders' investment by generating profits and increasing the value of the company's shares.

Wealth Maximization as the Goal of the Firm Implies Enhancing