Student Solution

-->

"Education is the most powerful weapon which you can use to change the world”
– Nelson Mandela

1 University

1 Course

1 Subject

Finance for Managers_Discussion 1

Finance for managers_Discussion 1

Q 1. Should a company emphasize maximizing shareholder wealth or maximizing profits? Explain. 2. Should ethics and social responsibility play a part in maximizing profits or shareholder wealth?

View Related Questions

Solution Preview

Profit maximization can be regarded as the financial management’s goal. This has been always the traditional business objective. Profit is the used yardstick in the assessment of the performance and attractiveness of entities of business. On the other hand, maximization of wealth of stockholder is a long-term goal as the interest of stockholder is there in the present profits and in the future. The chief objective is to make sure that market value of ordinary shares of the entities is highest.