Which of the following should be done by a manager wishing to raise his stock's price? I. Focus on maximizing the present value (PV) of the free cash flow.

A) I only
B) II only
C) I and II
D) II and II

Question

Which of the following should be done by a manager wishing to raise his stock's price? I. Focus on maximizing the present value (PV) of the free cash flow.

A) I only 
B) II only 
C) I and II 
D) II and II

Quizplus · Accepted Answer

Focusing on maximizing the present value of free cash flow will increase the company's profitability, which can lead to an increase in the stock's price. However, stock buybacks (option II) may not necessarily boost the stock price in the long term and can even be viewed negatively by some investors. Therefore, option I is the best choice for raising the stock's price.

Which of the Following Should Be Done by a Manager