Growth can be reconciled with the goal of maximizing firm value:
A) because greater growth always adds to value.
B) because growth must be an outcome of decisions that maximize NPV.
C) because growth and wealth maximization are the same.
D) because growth of any type cannot decrease value.
E) None of these.

Question

Quizplus · Accepted Answer

Growth can be a positive outcome for a firm, but it must also be accompanied by positive NPV decisions. Growth for growth's sake may not necessarily add value to a firm. Therefore, the goal of maximizing firm value must be achieved through decisions that consider both growth opportunities and NPV calculations.

Growth Can Be Reconciled with the Goal of Maximizing Firm