"Increasing shareholder wealth" means increasing the
Blank
______.

Question

"Increasing shareholder wealth" means increasing the 
Blank
______.

BlackTom AI · Accepted Answer

Take a look at what the question is asking: the goal described is tied to what shareholders care about, namely the value of what they own in the company. 
Option 1: 'current common stock value' – This phrasing aligns with the concept of shareholder wealth, which is driven by the market value of the company's equity (often approximated by the stock price times shares outstanding). It captures the true economic value that shareholders hold. 
Option 2: 'market value of liabilities' – This would measure how much the company owes to others; increasing this would typically hurt shareholders, not increase their wealth. It does not reflect owners’ wealth in the firm. 
Option 3: 'current bond value' – Bond value relates to debt securities and the cost of debt; while important to creditors and the firm’s financing mix, it is not the measure of shareholder wealth. Investors focus on equity value, not the value of the debt instruments. 
Option 4: 'book value of liabilities' – The book value is an accounting measure that records historical cost and may differ from market realities; it does not represent the wealth of shareholders, which hinges on market perceptions of equity value rather than historical liability figures. 
In summary, the statement that best captures increasing shareholder wealth is the one centered on the market value of the company’s equity, i.e., the current common stock value, while the other options describe measures that do not directly reflect shareholder wealth.

"Increasing shareholder wealth" means increasing the Blank ______.

View Explanation

Log in for full answers

Similar Questions

Which of the following benefits directly from any increase in the corporation's profitability?

The goal of financial management is to increase the value of Blank ______.

While profit-making companies set various goals, their overarching goal is most often to maximize Blank ______. BlackTom题目解析

In a consumer society, many adults channel creativity into buying things

Economic stress and unpredictable times have resulted in a booming industry for self-help products

People born without creativity never can develop it

A product has a selling price of $20, a contribution margin ratio of 40% and fixed cost of $120,000. To make a profit of $30,000. The number of units that must be sold is: Type the number without $ and a comma. Eg: 20000

Which of the following statement regarding cost is correct:

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler