0
Shareholders are primarily concerned about the firm's profitability and financial performance, as these factors directly impact their return on investment. They closely monitor metrics such as earnings per share, dividends, and overall market value. Additionally, shareholders are interested in the company's growth potential, management effectiveness, and risk management strategies to ensure long-term sustainability and value creation. Overall, their main goal is to maximize their investment returns while minimizing risks.
What else can I help you with?
How does capital budgeting affect shareholders wealth?
since it is a long run investment, the ability of the firm to involve in effective planning affect the wealth of the shareholders
Goal of the firm?
profit maximization &wealth maximization of shareholders.
Why do shareholders have the most risk of running a firm?
Shareholders bear the most risk in a firm because they are the last to be paid in the event of bankruptcy, meaning they may lose their entire investment if the company fails. Unlike creditors and bondholders, who have a priority claim on the firm's assets, shareholders receive returns only after all other obligations are met. Additionally, shareholders are exposed to market volatility and operational risks, as their returns depend on the company's performance and stock price fluctuations. This combination of factors makes their financial stake inherently riskier than that of other stakeholders.
Why should the shareholder of a firm care about maximizing a value of a firm?
the value of a firm determines their wealth.if the value of a firm,which is the market price per share of the total number of shares issued,is increased,invariably the shareholders' return is increased..by John I Agwu
Has the lowest claim on the assets and cash flow of the firm?
Common shareholders have the lowest claim on the assets of assets of a firm. They have only a residual claim on the assets and are far below the preferred stock classification.
Who are equity shareholders?
Equity shareholders are investors that own the shares of the firm. As an investor you need to pay to get ownership of the shares. The shares are either bought from another investor, or from the firm, when the shares are issued.
The retained earnings of the firm belong to?
The reatined earnings of a firm belongs to teh partners of the firm and in case of a company it belongs to the shareholders.
How does capital budgeting affect shareholders wealth?
since it is a long run investment, the ability of the firm to involve in effective planning affect the wealth of the shareholders
What kind of person is concerned mostly with his or her own thoughts?
a self-centred person is concerned mostly with their own thoughts
Goal of the firm?
profit maximization &wealth maximization of shareholders.
What should the management of Sports Products Inc pursue as its overriding?
Current theory asserts that the firms' proper goal is to maximize shareholders' wealth, as measured by the market price of the firm's stock. A firm's stock price reflects the timing, size and risk of the cash flow that investors expect a firm to generate over time. So financial managers should undertake only those actions that they expect will increase the value of the firm's future cash flow. Theorical and empirical arguments support the assertion that managers should focus on maximization shareholder wealth. Shareholders of a firm are sometimes called residual claimants, meaning that they have claims only on any of the firm's cash flows that remain after employees, suppliers, creditors, governments and other stakeholders are paid in full. As you see, shareholders stand at the end of this line so if the firm cannot pay the stakeholders first, shareholders receive nothing! Shareholders also bear most of the risk of running the firm. So if firms did not manage to maximize shareholders wealth, investors would have little incentive to accept the risks necessary for a business to succeed.
Why do shareholders have the most risk of running a firm?
Shareholders bear the most risk in a firm because they are the last to be paid in the event of bankruptcy, meaning they may lose their entire investment if the company fails. Unlike creditors and bondholders, who have a priority claim on the firm's assets, shareholders receive returns only after all other obligations are met. Additionally, shareholders are exposed to market volatility and operational risks, as their returns depend on the company's performance and stock price fluctuations. This combination of factors makes their financial stake inherently riskier than that of other stakeholders.
Why should the shareholder of a firm care about maximizing a value of a firm?
the value of a firm determines their wealth.if the value of a firm,which is the market price per share of the total number of shares issued,is increased,invariably the shareholders' return is increased..by John I Agwu
Is additional paid in capital refers to a firm's retained earnings?
Additional paid in capital (or APIC) is a component of the shareholders equity section of the balance sheet. Retained earnings is a separate component of shareholders equity.
Has the lowest claim on the assets and cash flow of the firm?
Common shareholders have the lowest claim on the assets of assets of a firm. They have only a residual claim on the assets and are far below the preferred stock classification.
What is the effect of increase in share capital on the control of a firm in the UK?
An increase in share capital can dilute the control of existing shareholders in a UK firm, especially if new shares are issued to outside investors or new shareholders. This dilution occurs because the ownership percentage of current shareholders decreases, potentially reducing their influence in decision-making processes. However, if existing shareholders participate in the capital increase, they can maintain their proportional control. Overall, the effect on control largely depends on how the new shares are distributed and who subscribes to them.
What is the financial definition of the term net of when it is used in such as net of taxes net of special charges net of fees?
Net WorthWhile there is no doubt that the preference shareholders are the owners of the firm, the real owners are the ordinary shareholders who bear all the risk, participate in the management and are entitled to all the profits remaining after all possible claims of preference shareholders are met in full.Thus it can be said that,Average Ordinary Shareholders Equity = Net Worth Of CompanyReturn on Net Worth = Net Profit After Tax - Preference DividendAverage Equity of the Ordinary Shareholders Equity or Net WorthIt is probably the single most important ratio to judge whether the firm has earned satisfactory return for its equity shareholders or not. Its adequacy is judge by8 Comparing with the past records of the same firm8 Inter-firm comparison8 Comparison with the overall industry average
