Which one of the following is a criticism of equating the goals of maximizing the ROE of a firm and maximizing the firm's shareholder wealth?

Question

Quizplus · Accepted Answer

A) This is a valid criticism of ROE as a goal since after-tax earnings may not accurately represent available cash flows.
B) This is also a valid criticism since ROE disregards the risk associated with generating that return.
C) This is a valid criticism since ROE only considers the profitability of the investment without considering the size of the investment or future cash flows. 
Therefore, all of the above statements are valid criticisms of equating the goals of maximizing ROE and maximizing shareholder wealth.

Which One of the Following Is a Criticism of Equating