CASE 1 (20 points) We claim that the goal of the firm is to maximize current market
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Question:
- CASE 1 (20 points)
- We claim that the goal of the firm is to maximize current market value. Could the following actions be consistent with that goal? Explain.
- The firm adds a cost-of-living adjustment to the pensions of its retired employees.
- The firm reduces its dividend payment, choosing to reinvest more earnings in the business.
- The firm buys a corporate jet for its executives.
- The firm drills for oil in a remote jungle. The chance of finding oil is only 1 in 5.
Instructions:
Justify your opinion on each of four statements above
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