When discussing public policy related to corporate governance, a financial economics perspective suggests that shareholders’ interests should be evaluated in terms of: A. Maximizing the return on each individual stock B. The impact on shareholders’ diversified portfolios C. Correcting irrational choices by rationally ignorant shareholders D. All of the above E. None of the above

When discussing public policy related to corporate governance, a financial economics perspective suggests that shareholders’ interests should be evaluated in terms of: A. Maximizing the return on each individual stock B. The impact on shareholders’ diversified portfolios C. Correcting irrational choices by rationally ignorant shareholders D. All of the above E. None of the above

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter8: Business Organizations

Section: Chapter Questions

Problem 17AA

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How would each of the following actions be expected to affect shareholder wealth?a. Southern Company adopts fuel-switching technology at its largest power plants.b. Ford Motor Company pays $2.5 billion for Jaguar.c. General Motors offers large rebates to stimulate sales of its automobiles.d. Rising interest rates cause the required returns of shareholders to increase.e. Import restrictions are placed on the French competitors of Napa wineries.f. There is a sudden drop in the expected future rate of inflation.g. A new, labor-saving machine is purchased by Wonder Bread and results in the layoff of 300 employees.
Which of the following stakeholders of a company would most likely be responsible for formulating a corporate strategy? Select one: A. the middle manager B. the creditors C. the first-line employees D. the chief executive officer
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	A.	Maximizing the return on each individual stock
	B.	The impact on shareholders’ diversified portfolios
	C.	Correcting irrational choices by rationally ignorant shareholders
	D.	All of the above
	E.	None of the above