The authors note that the goal of maximizing the market value of the firm may be more appropriate than maximizing short-run profits because:
A) the market value of the firm is based on long-run profits.
B) managers will not focus on increasing short-run profits at the expense of long-run profits.
C) this would more closely align the interests of owners and managers.
D) all of the above

Question

Quizplus · Accepted Answer

The authors note that maximizing the market value of the firm takes into account long-run profits, which aligns the interests of owners and managers and avoids a focus on short-term gains at the expense of long-term success. Therefore, all of the above choices are correct.

The Authors Note That the Goal of Maximizing the Market