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D2 study guide ask that we should “demonstrate why the primary objective of fin. performance should be primarily concerned with the benefits to shareholders”
Help! please help me to demonstrate. please give details.By demonstrate here, he really means explain.
It is ultimately the shareholders that need to be kept happy – partly because they obviously own the company, but more importantly because if they are not happy then the share price will fall and it will be harder for the company to raise money.
How to keep the shareholders happy? Pay good dividends, keep the EPS increasing etc etc
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