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What is the main criticism in using shareholder wealth as the best criterion in evaluating the performance of a financial manager?



A. It does not take into account the shareholder s exposure to financial risk.
B. It is not sustainable.
C. It does not take into account the size of the shareholder's investment.
D. Maximizing profits is a more suitable criterion.
E. Share market prices can be manipulated in the short term.

This question is part of Introduction to Financial Management
Asked by Hdtchr, Last updated: May 25, 2020

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1 Answer

John Smith

John Smith

Answered Mar 20, 2017

Share market prices can be manipulated in the short term.

One does not even have to be a shareholder to use the internet and its plethora of investor cafes to spread unsubstantiated but credible rumors that may have short term impact on the stock market.
 

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