Final answer:
Maximizing a stock's intrinsic value and communicating effectively with stockholders is crucial for attracting outside investors and acquiring the financial capital necessary for a firm's growth. This also involves careful consideration of dividend payouts and reinvestment strategies by the board of directors.
Step-by-step explanation:
It is important that managers should try to maximize their stock's intrinsic value and then communicate effectively with stockholders because as a firm becomes established and likely to profit, personal knowledge of managers becomes less crucial. Information about the company's products, revenues, costs, and profits becomes widely available, attracting outside investors like bondholders and shareholders. These investors provide financial capital to the firm, facilitating its growth. Additionally, if a firm is successful and profitable, the board of directors will need to consider dividend payouts or reinvestment strategies, while balancing the cost and legal requirements associated with issuing stocks.