Question

We can imagine the financial manager doing several things on behalf of the firm’s stockholders. For example, the manager might do the following: Increase the firm's market value by investing in real assets. Modify the firm’s investment plan to help shareholders achieve a particular time pattern of consumption. Choose high- or low-risk assets to match shareholders’ risk preferences. Help balance shareholders’ checkbooks. However, in well-functioning capital markets, shareholders will vote for only one of these goals. Which one will they choose?

Answer 1

Answer:

a. Make shareholders as wealthy as possible by investing in real assets.

Explanation:

We can imagine the financial manager doing several things on behalf of the firm’s stockholders. For example, the manager might do is make the shareholders as wealthy as possible by investing in real assets.

The shareholders has paper financial leverage and only the value of decomposition of the firm increases, it means that the shareholders have the ability to do the financial leverage.

And the hell used to decompose in the market which it is good to I must be have to the ability to do it in a simple way to think in a simple language.