A firm that holds strictly to the shareholder theory of the firm would be concerned with providing value for its shareholders against other stakeholders.
A shareholder is a part owner of a public company. They hold interest in the company through the shares of stock they purchase. On the other hand, a stakeholder is interested in the general performance of a company not because of its stock performance since they do not hold any shares.
Stakeholders include employees, managers, the public, community, media, and government. Stakeholders want the company to succeed in the long-term unlike stockholders who are interested only in the returns from their stock investments.
Thus, when a firm subscribes totally to the shareholder (stockholder) theory, it concentrates on providing value for its stockholders.
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