The goal of a firm’s management is to maximize the firm’s value, which is in the best interests of the firm’s owners.A. TrueB. False
Question
The goal of a firm’s management is to maximize the firm’s value, which is in the best interests of the firm’s owners.A. TrueB. False
Solution
A. True
The primary goal of a firm's management is indeed to maximize the firm's value. This is because the firm's value is directly linked to the wealth of the firm's owners (the shareholders). If the firm's value increases, the wealth of the owners also increases. Therefore, it is in the best interests of the owners for the management to strive to maximize the firm's value.
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