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Understanding the Link between Business Goals and Financial Decisions
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Understanding the Link between Business Goals and Financial Decisions

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Questions and Answers

The fundamental goal of a business is to create value for the company’s owners.

True

The primary goal of a business is to maximize the wealth of the firm's owners - the stockholders.

True

Investors react to poor investment or dividend decisions by causing the total value of the firm's stock to fall.

True

The simplest and best measure of stockholder wealth is the firm's share price.

<p>True</p> Signup and view all the answers

Good decisions in a business are solely based on the changes in stock price.

<p>False</p> Signup and view all the answers

Investors react to poor investment decisions by pushing up the price of the stock.

<p>False</p> Signup and view all the answers

The stock price of a firm is influenced by factors other than the firm's decisions.

<p>True</p> Signup and view all the answers

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