bus 401 week 1 dq 1 Goals of the Firm and Real Interest Rates
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Goals of the Firm and Real Interest Rates
1-2. Firms often involve themselves in projects that do not result directly in profits. For example, IBM and ExxonMobil frequently support public television broadcasts. Do these projects contradict the goal of maximization of shareholder wealth? Why or why not?
No, this does not contradict the goal of maximizing shareholder wealth. During the first chapter, it was stated that a dollar invested today is worth more than a dollar a year from now. There is no guarantee on how much the return will be because there are other factors that play into that. This is just an existing investment that both companies anticipate to secure returns in the future. I believe this as a calculated investment, it does not guarantee future returns, but it is...