A risk that shareholder wealth-maximizing managers should seek to offset in the firm that they are managing is:
A)dividend payout risk
B)exchange rate risk
C)research and development risk
D)leasing risk

Question

Quizplus · Accepted Answer

Exchange rate risk is a risk that shareholder wealth-maximizing managers should seek to offset in the firm that they are managing. This is because exchange rate fluctuations can have a significant impact on a firm's profitability and financial performance. By hedging against exchange rate risks, managers can ensure that the firm's financial performance remains stable and that shareholder wealth is protected. The other options - dividend payout risk, research and development risk, and leasing risk - are all important risks to manage, but they are not as critical as exchange rate risk for maximizing shareholder wealth.

A Risk That Shareholder Wealth-Maximizing Managers Should Seek to Offset