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Asked by Ramesh Suresh on Jul 24, 2024

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The primary financial goal of a corporation is to maximize:

A) shareholders wealth.
B) earnings per share.
C) stock price.
D) Both a & c
E) All of the above

Shareholders Wealth

The total value of an individual's or entity's ownership stake in a company, typically measured by stock price and dividends.

Financial Goal

A specific monetary target to save, invest, or spend money within a definite period, guiding financial planning and decision-making.

Corporation

is a legal entity that is separate and distinct from its owners, providing them with limited liability, and it has the ability to enter into contracts, loan and borrow money, sue and be sued, and pay taxes.

  • Comprehend the objectives of financial management, including shareholders’ wealth maximization.
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TH
Tanner HearneJul 29, 2024
Final Answer :
D
Explanation :
The primary financial goal of a corporation is to maximize shareholders wealth, which can be achieved by increasing the value of the stock price. Therefore, both options "a" and "c" are correct. "B" (earnings per share) is not the primary financial goal, but rather a tool used to achieve the primary goal. Option "E" is not correct as "B" is not a primary financial goal but rather a tool used to achieve it.

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