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Of course yes, if organization assum objectives of shareholders wealth maximization, it will struggle for profit maximization which will lead to more operations. operations of business needs employees, which will be hired from the society and the unemployment rate will decreased, on the other hand the organization will survive in long run and would meet the demands of the society as whole....

Haleem

Graduate school of business

University of gothenburg Sweden

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12y ago
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9y ago

Yes, shareholder wealth maximization is a great approach for businesses. With a focus on shareholder wealth the business can grow.

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Q: Does shareholder wealth maximization benefit society as a whole?
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Which is more comprehensive objective profit maximization or shareholder wealth maximization?

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.


Maximization of shareholder wealth as a goal is superior to profit maximization because?

it is operating cost


What is the difference between profit maximization and wealth maximization?

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.


What is shareholder wealth maximization model?

Shareholder Wealth Maximization Model, unlike simple profit-maximization incorporates the time dimension and risk. The Shareholder-Wealth Maximization model (SWM) goal states that the objective of a firms management should be to maximize the present value of the expected future cash flows to equity owners (shareholders).Consider cash flows to be the same as profits. Hence, the value of a firms stock is equal to the present value of all expected future profits, discounted at the the shareholders required rate of return.


What is the difference between shareholder wealth maximisation and stakeholder wealth maximisation?

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.

Related questions

How does the goal of maximization of shareholder wealth deal with the problems?

How does the goal of maximization of shareholder wealth deal with uncertainty and timing?


How does the goal of maximization of shareholder wealth deal with those problems?

How does the goal of maximization of shareholder wealth deal with uncertainty and timing?


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

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


Outline how an agency problem can interfere with the implementation of the goal of shareholder wealth of maximization?

Outline how an agency problem can interfere with the implementation of the goal of shareholder wealth of maximization


Which is more comprehensive objective profit maximization or shareholder wealth maximization?

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.


What is meant by the goal of maximization of shareholders wealth?

The goal of maximization of shareholder wealth is meant by; first, in most cases


Maximization of shareholder wealth as a goal is superior to profit maximization because?

it is operating cost


What is the new foreign competitors shareholder wealth-maximization of a firm?

COB


What is the difference between profit maximization and wealth maximization?

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.


What is the agency problem and how might it impact the goal of maximization of shareholder wealth?

The agency problem is a result of the separation between the decision makers and the owners of the firm. As a result managers may make decisions that are not in line with the goal of maximization of shareholder wealth.


Would management pursue goals other than shareholder wealth maximization?

Of course yes, but maximizing shareholder wealth would be the primary goal of any organization that has shareholders.


Explain the rationale for selecting shareholders wealth maximizatio as the objective of the firm?

Explain the rationare for selecting shareholder wealth maximization as the objective of the firm.Include a consideration of profit maximization as an alternative goal