Page of 10 1. What is the primary goal of the corporation? (A) Produce as much as possible, thereby using its plant and equipment more efficiently (B) Compete with other firms in the same industry and win. (C) Maximize shareholder wealth. Increase sales, expand business, and cut costs. 2. Both Absco and Babsco are expected to pay the same dividend of $2 per share next year and both have the same discount rate of 10% for their stocks. Which of the following statement must be true? (A) Absco and Babsco stocks must have the same price. Stock price is independent of dividend growth. Their stock price could be lower than $2 per share. The given information is insufficient to determine their stock price. 13