What is the market price of a share of stock for a firm that pays dividends of $1.20 per share, has a P/E of 14, and a dividend payout ratio of 0.4?

The Market Value Added (MVA) is the ____.

1. indicator of how successful a firm has been at increasing its financing its assets
2. return on total capital minus cost of capital
3. indication of an increase in operating efficiency
4. positively related to the present value of all expected future EVA.

For our purpose, Shareholders' Value Maximization will be the preferred goal for all of the following reasons EXCEPT:

1. The shareholders' value maximization goal deals with accounting profit, while the profit maximization goal attempts to make cash available to meet financial needs.
2. Shareholders' value maximization is a long-run goal and the public image of the corporation may be of deep concern to shareholders including the wealth effect
3. The effects of all financial decisions are reflected in the price of the stock being traded in efficient markets
4. The complexities and uncertainties in the external environment are all absorbed in the value of the stock.