A financial manager makes a choice of the amount and source of capital based on how the choice will impact
A)debt-equity ratio.
B)debt value.
C)earnings per share.
D)firm value.

Question

Quizplus · Accepted Answer

The financial manager's primary goal is to maximize the firm's value, which is ultimately driven by the profitability of the firm's investments. Therefore, the best choice would be the one that maximizes firm value, regardless of the impact on the debt-equity ratio, debt value, or earnings per share.

A Financial Manager Makes a Choice of the Amount and Source