Asked by lydia snyder on May 12, 2024

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The maximization of shareholders wealth is measured by increases in:

A) profits.
B) earnings.
C) stock price.
D) sales.

Shareholders Wealth

The total value of all shares of stock that a company's shareholders own, reflecting the company's overall market value.

Stock Price

The current market price at which a share of a company is bought or sold.

Maximization

The process of finding the highest possible level of a particular variable, such as profit, efficiency, or utility, under given constraints.

  • Understand the goals of financial management, such as maximizing shareholders' wealth.
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AH
Alexandra HernandezMay 15, 2024
Final Answer :
C
Explanation :
Maximizing shareholders wealth is measured by increases in the stock price because it reflects the company's ability to generate future profits and cash flows, which are the ultimate drivers of shareholder value. While profits and earnings are important metrics, they do not necessarily translate into increases in the stock price, which is the key driver of shareholder wealth. Sales are also important, but they do not capture the profitability or efficiency of the company.