primary operating goal of a publicly-owned firm interested in serving its stockholders should be to
A) Maximize the stock price per share over the long run, which is the stock's intrinsic value.
B) Maximize the firm's expected EPS.
C) Minimize the chances of losses.
D) Maximize the firm's expected total income.
E) Maximize the stock price on a specific target date.

Question

Quizplus · Accepted Answer

The primary goal of a publicly-owned firm serving its stockholders should be to maximize the stock price per share over the long run, which is the stock's intrinsic value. This goal aligns the interests of the stockholders with the firm's management and leads to long-term profitability and success. Maximizing EPS, minimizing losses, or maximizing total income may not necessarily lead to the long-term increase in stock price that is desired by stockholders. Maximizing stock price on a specific target date may also not be the best approach, as it could lead to short-term decision-making that may not be beneficial in the long run.

Primary Operating Goal of a Publicly-Owned Firm Interested in Serving