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Pavlova-9 [17]
3 years ago
15

If a firm's goal is to maximize its earnings per share, this is the best way to maximize the price of the common stock and thus

shareholders' wealth.
Business
1 answer:
Ronch [10]3 years ago
7 0

Answer:

False

Explanation:

As maximization of the earnings per share might not be the same thing as the wealth maximization which is the primary goal of the company because the company not only has to generate higher profits but also manage all the risks of the entity which might increase by unethical trading in race to increase earnings per share. Furthermore, to enjoy less costly debt finance which would increase the earnings per share, would result in increase in financial risk, which might again head the company towards disaster if not well managed.

The other solid point against the statement would be that the primary purpose can not be the maximization of earnings per share as it stresses upon spending less on corporate social responsibility and as the result the company stock will be less valued at stock exchange. The less valued stock is because the companies like Dow and S & P Global adds no green value to the stock if the company is not spending on social responsibility programs.

Hence the statement is incorrect.

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Digby's Elite product Don has an awareness of 72%. Digby's Don product manager for the Elite segment is determined to have more
Leya [2.2K]

Answer:

$2,000,000

Explanation:

current awareness of Digby's Don = 72%

next year it will decrease to 72% - 1/3 = 48% if the firm does nothing

  • first $1,000,000 adds 22% awareness ⇒ total awareness = 48% + 22% = 70%
  • second $1,000,000 adds 23% awareness ⇒ total awareness = 70% + 23% = 93%
  • third $1,000,000 adds 5% awareness ⇒ total awareness = 93% + 5% = 98%

Don's competition, Axe, has an awareness level of 77% and it should remain the same next year. So, Digby as to spend at least $2,000,000 to earn more awareness than Axe. Don's awareness level will be 93%.

7 0
3 years ago
Revenues for United Parcel Service (UPS) come from the following business segments: 61 percent from U.S. package delivery operat
Rus_ich [418]

Answer:

B

Explanation:

This is a dominant business strategy. As a dominant business, operations starts in one major industry and then the firm expands by purchasing businesses or creating new firms.

UPS has a dominant strategy because of the different business segments in the firm. 61 percent from U.S. package delivery operations, 22 percent from international package delivery, and 17 percent from non-packaging operations.

3 0
3 years ago
Suppose a publisher faces the following costs of producing 10,000 newspapers each month: $5,500 cost of labor; $2,200 monthly mo
HACTEHA [7]

Answer:

Variable cost = $6,550

Explanation:

Variable cost is the cost incurred during the production process that changes with quantity of goods produced. For example labor, machine operating cost, and raw materials.

The other type of cost is variable cost that does not change with volume of production, but rather remains constant. For example rent, tax, and so on.

In the given instance the costs that are variable are cost of labor, cost of electricity to run printing presses, and cost of ink for paper.

Monthly mortgage and property tax are fixed cost that must be paid regardless of production volume.

variable cost = $5,500 + $800 + $250

Variable cost = $6,550

3 0
3 years ago
During step 3 of activity-based costing, activity overhead cost pool rates are used to assign overhead costs to final cost objec
netineya [11]

Answer:

HEY

Explanation:

6 0
3 years ago
Which of the following is an example of money as a unit of account?
Savatey [412]
The answer is lending your bestfriend 25 dollars to buy a guitar.
Unit of costs is the amount incurred by a particular company to be able to produce, store and sell the number of the same products. In the given example. 25 dollars is the cost of the guitar or the unit of costs.
8 0
3 years ago
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