The goal to maximise the value of the company's shares focuses on maximising the value of:

Question

Quizplus · Accepted Answer

The goal to maximize the value of the company's shares is most directly achieved by maximizing the value of cash flows. This is because the value of a company's shares is fundamentally linked to the present value of its future cash flows. Profits, productive assets, and revenues are important, but they are means to the end of generating cash flows. Investors value a company based on the cash flows it can generate, as these cash flows are what will ultimately be returned to them in the form of dividends or capital gains.

The Goal to Maximise the Value of the Company's Shares