Is stock price maximization the same as profit maximization?

Q: Why is P/E Multiples Approach better than book value per share when it comes to valuing the stocks…

A: P/E is a better approach because it uses earnings that reflect the performance of a firm.

Q: Does profit maximization always lead to shareholder’s maximization?

A: Profit Maximization: It is a traditional and narrow approach which aims at maximization of return by…

Q: What rate of return can stockholders expect to receive on retained earnings?

A: Stockholders can expect returns more than its WACC on retained earnings.

Q: The issue as to whether dividend policy has an effect on share prices raises a question as to…

A: Bird in hand theory of dividend policy says that investors prefer dividend as compared to capital…

Q: why is the difference between a stock's current market price and its intrinsic value important to a…

A: Stock's current market price: The current stock price of a company is a price that an investor is…

Q: Should the goal of the firm be to maximize the price of its stock?

A: Every company has its own vision and mission statement. Having a vision paves way for achieving the…

Q: If a firm's goal is to maximize its earnings per share, this is the bestway to maximize the price of…

A: By make the most of the price of a share of the company's common stock is an increasingly suitable…

Q: In this section we examine three theories of investor preference: The dividend irrelevance theory.…

A: Hey, since there are multiple questions posted, we will answer first question. If you want any…

Q: Theory believes that dividend or capital gains has an impact on the price of the stock Select the…

A: Dividend relevance theory:- This theory says that the dividend or capital gain paid by the firms is…

Q: Are short-term profits always in the best interest of stockholders? Explain

A: Short term profits are generally earned for a period of less than one years it may be quarterly,…

Q: what is the price of company stock? iS IT WORTH TO INVEST IN? EXPLAIN

A: We are given some financial ratios  for 3 consecutive years for a company based on which we need to…

Q: There will likely be a difference between your calculation of the Company’s intrinsic value and its…

A: Intrinsic value is the true or inherent value of a company. It is a fundamental value which is…

Q: Companies sell common stock to raise long-term capital. What are the pros and cons of selling stock?…

A: Common Stock : Common stock is a type of security that represents ownership of equity in a company.…

Q: A business can be valued by capitalizing its earnings stream. Does one measure make more sense than…

A: Hello. Since you have posted multiple questions and not specified which question needs to be solved,…

Q: Is stock with Increasing dividend yield and decreasing market price per share a good stock to…

A: Dividend yield is the amount of money given to shareholders for owning a share of a company's stock…

Q: How does the use of financial leverage affect current stockholders’control position?

A: Financial leverage refers to the extent of debt in the capital structure. A highly leveraged firm is…

Q: What are three techniques stockholders can use to motivate managers to maximizetheir stock’s…

A: Managers are required to motivate so that they can work specifically for achieving a predetermined…

Q: market capitalization is higher, lower, equal to total shareholders' equity

A: Market capitalization is computed by multiplying the current market price of the shares with the…

Q: According to the bird-in-the-hand-theory, how do high dividends impact company value and why?

A: The dividend is the amount that is paid to the shareholders as the return on the shares after paying…

Q: Do firms have any responsibilities to society at large? ◦Is stock price maximization good or bad…

A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…

Q: iscuss the ethics of dividends and illustrate how dividends and related issues (e.g. dividend…

A: A dividend is a payment made by the company out of its total profits to its stockholders.

Q: Using the corporate valuation model approach, what should be the company's stock price today?

A: Free cash flow = (EBIT*(1-T)) + Depreciation exp. - Capital expenditure - Changes in working capital…

Q: why would investors prefer to invest in a company with a regular divided policy than a company with…

A: Investors prefer to invest in corporations where dividends are received on regular basis. The reason…

Q: Write out the equation of corporate value model, and why there is a need of corporate value model…

A: The calculation of theoretical value of stock is known as stock valuation. It is important tool to…

Q: How does the use of financial leverage affect stockholders’ control position?

A: SOLUTION:- By raising capital through debt, the owners maintain control of the firm with limited…

Q: Would you prefer to invest in a company that has a regular dividend policy or a company that has a…

A: A "dividend policy" is defined as the policy where the corporation uses the structure for its…

Q: When a firm earns its profits, management would usually decide to use the earnings for future…

A: The term profit or net income of a company refers to the revenue that is left after adjusting for…

Q: What are the advantages and disadvantages of higher dividends to investors?

A: Dividend can be defined as the division of profits accumulated by the company to its shareholders in…

Q: What is the difference between a stock’s price and its intrinsic value? Why do investors and…

A:

Q: Which company stock is better to invest and why

A: Answer:-  Stock meaning:- A stock is a broad term that generally refers to any company's ownership…

Q: What is stock split? How is it equivalent to paying a dividend?

A: The stock split is events that increase the outstanding shares and reduce the stated par value. For…

Q: How do firms use long-run planning models to help set dividend policy?

A: The term Dividend denotes that a part of company's net profit which is available for equal…

Q: what is return on common shareholders' equity?

A: There are various ratios which measure the profitability of a firm like return on equity, return on…

Q: Discuss the nature of stock as an investment.  Do most stockholders play large roles in the…

A: Stockholders are the proprietors of a corporation. It is a kind of investment which provides high…

Q: Why doesn’t total stockholders’ equity equal the market value of the firm?

A: Stockholders’ equity:   Stockholders' equity means the net claim of owners of corporation on the…

Q: Why do firms change their dividends policy?

A: Dividends are paid as a reward to the shareholders in lieu of the money given to the corporates for…

Q: crease an

A: The shareholders' will be considered as the owners of the company. The bond holders, and debenture…

Q: How are share repurchases an alternative to dividends, and why might investors prefer them

A: The share repurchase is the alternative to dividends because when a company repurchases it’s issued…

Q: Is a company's dividend policy important? Please explain why or why not

A: Dividend policy is concerned with financial policies that involve paying a cash payout now or paying…