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.
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Good decisions in a business are solely based on the changes in stock price.
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Investors react to poor investment decisions by pushing up the price of the stock.
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The stock price of a firm is influenced by factors other than the firm's decisions.
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