Question

Which of the following statements is CORRECT?
a.A good goal for a firm's management is maximization of expected EPS.
b.Because most stock ownership is concentrated in the hands of a relatively small segment of society, firms' actions to maximize their stock prices have little benefit to society.
c.The potential exists for agency conflicts between stockholders and managers. You can increase future cash flows by making

Answer 1

Answer:

c.The potential exists for agency conflicts between stockholders and managers.

Explanation:

There is always the chance of conflicts between the stockholders and managers. As the former thinks that the management is not working properly and is just interest in their share of salary, and will not work on the aim of increasing stockholder's wealth.

Certainly the management also thinks that stockholder's just think for their benefit and not of the organization.

Accordingly this is the most correct statement of the provided statements.