Financial managers should strive to maximize the current value per share of the existing stock because:
A) Doing so guarantees the company will grow in size at the maximum possible rate.
B) Doing so increases the salaries of all the employees.
C) They have been hired for the purpose of representing the interest of the current shareholders.
D) Doing so means the ﬁrm is growing in size faster than its competitors.
E) The managers often receive shares of stock as part of their compensation.

Question

Quizplus · Accepted Answer

Financial managers have a fiduciary responsibility to represent the interest of the current shareholders and maximizing the current value per share of the existing stock aligns with this responsibility. Choice A, B, D, and E are not accurate justifications for this goal.

Financial Managers Should Strive to Maximize the Current Value Per