Profit Maximization and Value of the Firm Are Two Concepts

Multiple Choice

Profit maximization and value of the firm are two concepts which are:

A) Unrelated because cash flow is only one component of the firm's value
B) Closely linked because profit maximization translates into maximizing the firm's value
C) Unrelated because Net Present Value is used to assess the value of the firm
D) Closely linked because the value of a firm is the sum of its free cash flows in each year discounted at the firm's interest rate