Shareholder wealth is important to a company because it is the value that the shareholders have as a result of owning part of the company. A company usually faces the decision to pay off shareholder dividends or reinvest that wealth.
Shareholder and stakeholder in a company are the investors and company assets holder respectively. So the wealth maximization in both cases is nothing but increase in the share value for shareholder and company profitability for stakeholder.
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!
Outline how an agency problem can interfere with the implementation of the goal of shareholder wealth of maximization
maximize shareholder wealth