Which of the following goals of the firm are synonymous with the maximization of shareholder wealth?
A)Profit maximization
B)Risk minimization
C)Maximization of the total market value of the firm's common stock
D)None of the above

Question

Quizplus · Accepted Answer

Maximization of the total market value of the firm's common stock is equivalent to the maximization of shareholder wealth because it represents the value that the stockholders hold in the company. Profit maximization may not always result in maximizing shareholder wealth, as it does not take into account the risk associated with increasing profits. Risk minimization may be important for the firm, but it is not necessarily synonymous with maximizing shareholder wealth.

Which of the Following Goals of the Firm Are Synonymous