EOC5351 - EOL1 True/False Indicate whether the statement is...

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EOL1 True/False Indicate whether the statement is true or false. ____ 1. The proper goal of the financial manager should be to maximize the firm's expected profit, since this will add the most wealth to each of the individual shareholders (owners) of the firm. ____ 2. The goal of maximizing stock price is a detriment to society in that few of the actions that result in maximiza- tion of stock price also benefit society. ____ 3. If a firm's managers want to maximize stock price it is in their best interests to operate efficient, low-cost plants, develop new and safe products that consumers want, and maintain good relationships with customers, suppliers, creditors, and the communities in which they operate. ____ 4. If a firm's stock price falls during the year, this indicates that the firm's managers are not acting in sharehold- ers' best interests. ____ 5. An agency problem exists between stockholders and managers. A second agency problem arises between stockholders and creditors. Multiple Choice
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This note was uploaded on 03/20/2012 for the course EGMT 535 taught by Professor Smith during the Spring '10 term at Drexel.

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EOC5351 - EOL1 True/False Indicate whether the statement is...

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