How does maximizing the long-run expected cash flows to the firm translate into maximizing shareholders' wealth?
What will be an ideal response?
Answer: Shareholders invest in firms to realize a return. The returns from investing in a firm result from cash flows such as dividends or capital gains on the resale of shares of stock. Increasing the amount of money a shareholder can expect to receive increases the value of the shares of stock, thus increasing shareholders' wealth through a larger stream of cash flows and a larger expected capital gain.
You might also like to view...
The two major sources of capital for every type of business are capital that results from the investment of cash or other property by the owner or owners and capital that results from the receipt of dividends
a. True b. False Indicate whether the statement is true or false
With the increasing popularity of e-mail and the web to deliver support services, the Help Desk Institute predicts that eventually, the telephone will no longer play a role in customer service.
Answer the following statement true (T) or false (F)
In a subject to sale, the buyer is not personally liable to the seller's lender
Indicate whether the statement is true or false
The main limit of IPsec tunnel mode protection compared to transport mode protection in IPsec is ________
A) protection over only part of the route B) higher cost C) both A and B D) neither A nor B