American_Bankers_Association
CTFA · Question #179
Which of the following statements is not correct regarding earnings per share (EPS) maximization as the primary goal of the firm?
The correct answer is D. EPS maximization is concerned with maximizing net income. See the full explanation below for the reasoning.
Investment Management
Question
Which of the following statements is not correct regarding earnings per share (EPS) maximization as the primary goal of the firm?
Options
- AEPS maximization ignores the firm's risk level
- BEPS maximization does not specify the timing or duration of expected EPS
- CEPS maximization naturally requires all earnings to be retained
- DEPS maximization is concerned with maximizing net income
How the community answered
(57 responses)- A4% (2)
- B9% (5)
- C14% (8)
- D74% (42)
Topics
#earnings per share#EPS maximization#firm goals#risk and return
Community Discussion
No community discussion yet for this question.