What does it mean to “maximize the value of the firm”? In general, how
What does it mean to “maximize the value of the firm”? In general, how is value created? What factors determine value and how does each affect the value of the firm?
What will be an ideal response?
ANSWER
To maximize the value of the firm most commonly means to maximize the market capitalization of the firm for shareholders. More specifically, this means to maximize the present value of expected cash flows.
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