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Answered 2008-07-20 05:26:15

Shareholder wealth (more commonly referred to as shareholder

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Can there be difference between profit maximization and shareholders wealth maximization?

the difference between profit maximization and shareholders wealth maximization is that profit maximization is concern with profit that a company received based on inflow and outflow within a period while shareholders wealth maximization is concern with dividend and capital gain that shareholder received on a return of his/her investment.


What is the difference between wealth and profit maximization?

Shareholder wealth (more commonly referred to as shareholder value) is talking about the value of the company generally expressed in the value of the stock. Profit maximization refers to how much dollar profit the company makes.


Shareholder wealth maximization is considered to be a more appropriate goal for the firm than profit maximization because?

Shareholder wealth maximization is considered to be a more appropriate goal for the firm than profit maximization


What is the difference between profit maximization and value maximization?

discount rate


Which is more comprehensive objective profit maximization or shareholder wealth maximization?

If the company is public listed (trades in the stock market) their aim is shareholder wealth maximization whereas for a privately owned firm a profit maximization objective is appropriate.


Maximization of shareholder wealth as a goal is superior to profit maximization because?

it is operating cost


What is the difference between profit maxim1zation and shareholder wealth maxim1zatio?

Profit maximization means increase the over all asset of an organization where as wealth maximization of a share holder means enhance the value of the per share. Regards, Nandeep Singh


What is the difference between profit maximization and wealth maximization?

what is ultimate goal of firms.


What are the difference between the goals of profit maximization and maximization of shareholder wealth?

Profit maximization will result in due to the Higher earning of the targeted Company compared to its market value.This results in when the targeted company is issued lesser share compared to the EPS ratio determined exchanged share, before the merger.


Is there a difference between corporate profit maximization and maximization of shareholder wealth?

Sure, profit maximization relates to profits *only* while shareholder wealth also involves total company equity, debt ratios and any of 15 other financial performance measure ratios. Management could focus on profit maximization over a longer period of time, say, 40 years (Toyota), while the shareholder would rather see stock values and corporate total value increase immediately (get in and get out) (90% of American manufacturers). If management focused on short-term profit maximization, say at the expense of long term sales revenues, then shareholder wealth (stock price) could actually decrease as a result of the loss of market share. The conflict of interests between shareholders and executives is an example of the "principle-agent problem."


What is comparison between profit and shareholder wealth?

What is comparison between profit and shareholder wealth?What is comparison between profit and shareholder wealth?


Why is shareholder wealth maximization a more appropriate goal than profit maximization?

Wealth maximization: To stay invested and multiply your invested money. The term is used for long-term investors. Short-term investors work for profit maximization. They sell their shares, as and when they get profit from the market.


Wealth maximization is a function of share price maximization discuss?

the difference between Profit maximisation and share price maximisation


What is the main objective of a firm in economics?

Profit maximization. Also called maximizing shareholder wealth.


What are the difference between value maximation and profit maximation?

Value maximization and profit maximization are very much related, the main difference being- value maximization means increases in owners' wealth achieved by maximizing of the value of a firm's common stock. profit maximization is the process by which a firm determines the price and output level that returns the greatest profit. the other difference among the two could be sited as- value maximization is seen as long term objective of a firm, whereas profit maximization is generally a short term objective.


Differentiate between value for money and profit maximization concept in corporate governance?

differentiate between value for money and profit maximization


What is the difference between stock price maximization and price maximization?

Profit maximization does not reflect (1) the timing of profits and (2) the riskiness of different operating plans. However, both of these factors are reflected in stock price maximization.


What is the Difference between profit maximization and sale maximization?

The key difference between profit maximization and sales maximization focuses on the handling of costs/expenses. Sales maximization is a topline income statement action that attempts to maximize sales revenues. Sales maximization techniques are used in scale industries where the expense base is largely fixed and there are limited variable costs associated with acquiring the next dollar of sales. Profit maximization is a multiline income statement action that attempts to both maximize sales (as represented above) while minimizing expenses in order to maximize effective margin. Profit maximization techniques are used across a variety of industries.


What is Three basic reasons is profit maximization inconsistent with wealth maximization?

Profit maximization is a narrow view which accounts for only the difference between sales and costs Wealth Maximization is broader and more philosophical in approach. Wealth maximisation includes not exhaustively culture , synergy, value, potential and wealth


Explain the rationale for selecting shareholders wealth maximizatio as the objective of the firm?

Explain the rationare for selecting shareholder wealth maximization as the objective of the firm.Include a consideration of profit maximization as an alternative goal


Profit maximization versus wealth maximization?

what should be goal of a firm


Who can tell you what is the difference between a Baumol Static Revenue-Maximization Model with a Dynamic one?

The main difference is that in the dynamic model the profit is reinvented allowing for more growth in the future, so it is a trade off between profit now or higher profits later, the management will need to get the shareholder to agree on that, a trust must be established between the shareholders and management. Hence, int he dynamic model, the minimum profit is not actually a constraint as it is in the static model.


What are the limitations and weaknesses in profit maximization?

what are the limitation and disadvantages of profit maximization


Advantages of profit maximization?

Profit maximization increase the graph of outputs.


What are the similarities between profit maximisation objectives and wealth maximisation objectives?

Both profit maximization and wealth maximization have the objective of increasing the net worth.