The key variables in the owner wealth maximization process are
A) earnings per share and risk.
B) cash flows and risk.
C) earnings per share and share price.
D) profits and risk.

Question

Quizplus · Accepted Answer

Cash flows and risk are the key variables that determine the owner's wealth maximization process. Cash flows represent the actual cash that the company generates, which is a crucial aspect of the owner's wealth. Risk is another essential factor, as the extent of risk taken by the company will directly impact the potential returns for the owner. Therefore, by managing cash flows effectively and balancing risk, companies can maximize shareholder value and increase the owner's wealth.

The Key Variables in the Owner Wealth Maximization Process Are