Question

The primary operating goal of a publicly-owned firm interested in serving its stockholders should be to a. Maximize its expected total corporate income. b. Maximize the stock price on a specific target date. c. Maximize the stock price per share over the long run, which is the stock's intrinsic value. d. Minimize the chances of losses.

Answer 1

The correct answer is (c)

Step-by-step explanation:

Firms usually sell shares to get funds; public-owned companies also use equity financing. The primary objective of every publicly owned company must be to increase the overall worth of shareholders by maximising the stock price, and to provide their shareholders with maximum profit which is possible. Publicly owned companies have to compete with private-owned companies, and to compete with them, the publicly owned companies should invest in the interest of their shareholders.