If managers are making decisions to maximise shareholder wealth,then they are primarily concerned with making decisions that should
A)positively affect short term profits at the expense of long term profits.
B)increase the market value of the firm's stock.
C)have no effect on the value of the firm's stock.
D)accomplish all of the above.

Question

Quizplus · Accepted Answer

Managers making decisions to maximise shareholder wealth are concerned with increasing the market value of the firm's stock. This involves making decisions that will benefit the long-term profitability of the company, which in turn drives up the stock price. Short-term profit maximisation at the expense of long-term profits is not beneficial to the company or its shareholders in the long run. Decisions that have no effect on the value of the firm's stock would not be aligned with the goal of maximising shareholder wealth. Therefore, the best choice would be B.

If Managers Are Making Decisions to Maximise Shareholder Wealth,then They