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.
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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.
The society benefit throughconsumer benefitemployee benefit
Another name for stockholder wealth maximization is maximization of the value of the common stock. Stockholders have little power in corporate decision making.
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.
Under what conditions might profit maximization not lead to stock price maximization?"
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.
There are various conditions under which profit maximization may not lead to stock price maximization. Some of them include outstanding shares and assets falling below the cost of the debt among others.
The ask price is the price a seller is willing to accept for a stock, while the bid price is the price a buyer is willing to pay for the stock. The difference between the two is called the spread.
Stock price maximization is often considered equivalent to shareholders' wealth maximization because a company's stock price reflects its market value, which is directly tied to the wealth of its shareholders. When a company's stock price increases, it typically indicates that the firm is generating greater profits or future growth prospects, benefiting shareholders. However, this relationship can be influenced by factors like market conditions and short-term vs. long-term performance, meaning stock price maximization does not always perfectly align with maximizing shareholder wealth in every situation.
The same actions that maximize stock prices also benefit society. Stock price maximization requires efficient, low cost operations that produce high quality goods and services at the lowest possible cost. Stock price maximization requires the development of products and services that consumers want and need, so the profit motive leads to new technology, new products and new jobs. Also, stock price maximization necessitates efficient and courteous service, adequate stocks of merchandise and well located business establishments.
of course it is bad research about it
Shrinkage is the difference between the stock on the inventory book and the actual physical stock. Shrinkage is also deifned as the difference between the value ( retail price ) of the stock on the inventory book and the value of the ( retail price ) actual physical stock. Shrinkage % is calculated as the difference between the value ( retail price ) of the stock on the inventory book and the value of the ( retail price ) actual physical stock by the retail sales of this volume
The bid price is the highest price a buyer is willing to pay for a stock, while the ask price is the lowest price a seller is willing to accept. The difference between the bid and ask price is known as the spread.
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.
The bid price is the highest price a buyer is willing to pay for a stock, while the ask price is the lowest price a seller is willing to accept. The difference between the bid and ask prices is known as the spread, which represents the cost of trading a stock.
The society benefit throughconsumer benefitemployee benefit