The primary goal of a publicly-owned firm interested in serving its stockholders should be to
A) Maximize expected total corporate profit.
B) Maximize expected EPS.
C) Minimize the chances of losses.
D) Maximize the stock price per share.
E) Maximize expected net income.

Question

Quizplus · Accepted Answer

The primary goal of a publicly-owned firm interested in serving its stockholders should be to maximize the stock price per share. This is because a higher stock price leads to greater returns for shareholders and improves the overall value of the company. Maximizing EPS or net income may not necessarily lead to a higher stock price, and minimizing losses may not be a realistic goal for any company. Ultimately, the success of a publicly-owned firm is measured by the value it brings to its shareholders, and a higher stock price reflects that value.

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