Managers of firms should only take actions that

Question

Quizplus · Accepted Answer

Managers of firms should take actions that increase the value of the firm's future cash flows, as this is the ultimate measure of a firm's success. However, they should also expect that these actions will increase the firm's share price, as this is what investors are most interested in. Additionally, any action taken by the managers should have benefits that are at least as great as the cost of those actions, ensuring that the firm is maximizing its resources and creating value for its stakeholders. Therefore, all of the above options (A, B, and C) are important considerations for managers when making decisions for the firm.

Managers of Firms Should Only Take Actions That