Is the shareholders wealth maximization goal long term or short term?

Answer 1

It's supposed to be a long term goal; but in the current markets short-term prices can raise stock values and get manager bonuses so they may bet tempted to go for more short term goals. Same thing for anyone preparing to sell their business and, for example, retire. Short term profits might get you a higher sal price, but the new buyer might find that that was at the cost of long term profits. For instance you raise short term profits by producing cheaper quality stuff at the same price, but lose customers for new owner down the road.

Answer 2

The maximization of stockholder wealth relies on balancing a combination of both short and long term goals. Companies that invest heavily in technology or equipment to enhance long term growth may incur large expenses that penalize short term earnings growth yet lay the foundation for sustained future growth. Long term strategic planning is a hallmark of companies that have been able to survive and prosper for decades. Companies with sound long term goals are likely to reward shareholders with the largest gains over time. Warren Buffett, arguably the world's most successful long term investor, is famous for saying that "our favorite holding period is forever."