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Outline how an agency problem can interfere with the implementation of the goal of shareholder wealth of maximization
The agency problem is a result of the separation between the decision makers and the owners of the firm. As a result managers may make decisions that are not in line with the goal of maximization of shareholder wealth.
Shareholder wealth is the difference between what they paid for the shares and the cost of the shares now. CEOs are responsible for building shareholder wealth.
How does the goal of maximization of shareholder wealth deal with uncertainty and timing?
Ethics contribute to shareholder wealth in a very huge manner. With proper ethics, it will lead to customer satisfaction which will increase the sales and cash flow which are the main components of shareholder wealth.
Outline how an agency problem can interfere with the implementation of the goal of shareholder wealth of maximization
Wealth maximation aims in maximising Shareholders wealth, employees wealth, profiting the external and internal parties of the firm, vendors, vendees, customers, investors, employers and all the parties interested in the benefit of the company. Wealth maximation results in increased goodwill, branding and reputation of the company. Where as profit maximation only deals with increased profits. Wealth maximation is a wider concept
The agency problem is a result of the separation between the decision makers and the owners of the firm. As a result managers may make decisions that are not in line with the goal of maximization of shareholder wealth.
Shareholder wealth is the difference between what they paid for the shares and the cost of the shares now. CEOs are responsible for building shareholder wealth.
How does the goal of maximization of shareholder wealth deal with uncertainty and timing?
Ethics contribute to shareholder wealth in a very huge manner. With proper ethics, it will lead to customer satisfaction which will increase the sales and cash flow which are the main components of shareholder wealth.
How does the goal of maximization of shareholder wealth deal with uncertainty and timing?
analysis of shareholder wealth maximisation
A closely held corporation is more likely to be a shareholder wealth maximizer. On the other hand, one with wide ownership and owners who are not directly involved will not be a shareholder wealth maximizer.
analysis of shareholder wealth maximisation
One advantage to shareholder wealth maximization is that the fact that the business draws more investors and raises more capital. A drawback is the fact that the money could be reinvested in the company instead of maximizing shareholder wealth.
To maximize Shareholder's Wealth!