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

how to maximize shareholder wealth

Aside from their salaries and benefits, do they profit from the business? The profits from the businesses in the economy accrue to the individuals. This conflict is called the agency problem. So, timing of returns is ignored by profit maximization, it is considered in wealth maximization.

If it appears that an action will not achieve this result, the action should not be taken at least not voluntarily. It ignores the time value of money. Profit maximization is the goal of any business.

advantages of wealth maximization

Without profit, no business can survive.

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Shareholder Wealth Maximization