Which one of the following actions by a financial manager least meets the goal of financial management?
A)Increasing current costs in order to increase the market value of the stockholders' equity
B)Agreeing to expand the company at the expense of stockholders' value
C)Refusing to lower selling prices if doing so will reduce the net profits
D)Agreeing to pay bonuses based on the market value of the company stock
E)Refusing to borrow money when doing so will create losses for the firm

Question

Quizplus · Accepted Answer

The primary goal of financial management is to maximize the value of the firm to its shareholders. Agreeing to expand the company at the expense of stockholders' value directly contradicts this goal, as it would decrease the value of the shareholders' equity rather than increase it.

Which One of the Following Actions by a Financial Manager