A manager should attempt to maximize the value of the ﬁrm by:
A)changing the capital structure if and only if the value of the ﬁrm increases.
B)changing the capital structure if and only if the value of the ﬁrm increases to the beneﬁts to inside
Management.
C)changing the capital structure if and only if the value of the ﬁrm increases only to the beneﬁts the
Debtholders.
D)changing the capital structure if and only if the value of the ﬁrm increases although it decreases the
Stockholders' value.
E)changing the capital structure if and only if the value of the ﬁrm increases and stockholder wealth is
Constant.

Question

Quizplus · Accepted Answer

The primary goal of a manager should be to maximize shareholder value. Changing the capital structure to increase the firm's value aligns with this goal, as it can lead to a higher overall valuation of the company, benefiting shareholders.

A Manager Should Attempt to Maximize the Value of the ﬁRm