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In an efficient market, maximizing the stock price will lead to Select one: a

Finance Jan 17, 2021

In an efficient market, maximizing the stock price will lead to
Select one:
a. None of the above
b. Maximization of stockholder wealth
c. Maximization of firm value
d. Maximization of social welfare
e. Maximization of bond prices
===========

You are a stockholder in a firm that is planning to make a significant acquisition. Which of the following compositions for the board of directors for your firm (the acquirer) is most likely to protect you against overpayment?
Select one:
a. Small board, with many insiders, with an independent chairman
b. Large board, composed mostly of outsiders, with an independent chairman
c. Large board, with many insiders, with an independent chairman
d. Small board, with many insiders and the CEO as chairman
e. Large board, with many insiders and the CEO as chairman
f. Small board, composed mostly of outsiders, with an independent chairman

Expert Solution

Q.1.Correct answer is b.

In an efficient market maximizing the stock price will lead to maximization of stockholders wealth.

2.Correct answer is b.

Large board ,composed mostly of outsider,with an independent chairman.

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