The goal of maximizing the market value of owners' equity, together with limited liability for a corporation's shareholders, imply that

Multiple Choice

• Managers are not liable for any illegal or unethical activities the company is engaged in.

• Managers should identify investment opportunities that are valued in the free marketplace.

• Managers must produce financial statements that truthfully reflect the firm's business operations.

• Managers have fiduciary duty to protect the interest of the firm's shareholders.

• Managers must be compensated with incentive pays (such as bonuses and stock options) in order to align their interests with those of the shareholders.