ABSTRACT
The stockholders in a corporation are, in law, the owners of the firm, so, according to one ideology, the only criterion applicable in judging the firm's behavior is how well the firm does by its stockholders. Even that is not a totally unambiguous criterion, for it may have to do only with how high the dividend rate is, or it may lead to consideration of the growth of book value of the stock, or to the price of the firm's stock in the stock market at some time relative to book value, or simply to appreciation of the stock in the stock market (a matter affected by many things, some external to the firm), or it may require consideration of stock dilution, or the implications of debt burden and leverage, and so on.
