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A company may have many goals besides profit maximization: To capture a certain percentage of market share. To produce the highest quality product. To have the highest level of customer satisfaction. To have the highest level of employee satisfaction. To have the lowest percentage of warranty repairs/product failures. To be the industry leader in product innovation. To be the industry leader in technology. To be environmentally friendly (green).
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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
Why Profit maximization can never be the objective of a firm?
Profit maximization IS an objective of a firm, but its not the ONLY objective. A firm will have different long term and short term goals which will vary depending on the current business cycle. If you need a more specific answer, please ask a more specific question. - Stavka
Goal of the firm?
profit maximization &wealth maximization of shareholders.
The differences between goal of a firm and profit maximization?
A goal of firm isn't always profit driven, it can be any cause. Profit maximization is revenue driven, making more money is it focus.
What is 'value of a firm'?
The 'value of a firm' is connected with profit maximization. It is the present value of the firm's current profit and the future profit. It determines the value accurately.
What is a firm's value?
The 'value of a firm' is connected with profit maximization. It is the present value of the firm's current profit and the future profit. It determines the value accurately.
Why wealth maximization is the ultimate goals of a firm?
8099
What are the difference between value maximation and profit maximation?
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.
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 are the basic objectives of financial management?
The objective of financial management is wealth maximization rather than profit maximization. Wealth maximization means the total value of the firm.
Why profit maximization is not regarded as the core financial objective of firm?
Profit Maximization is a short term objective as all it aims for is to generate a higher revenue for the period.This objective is generally followed if the firm is highly leveraged and a higher profit is required to service it. Wealth Maximization is followed as it looks to increasing the market value of the firms share capital and thus leads to an overall development of the firm and its capacity.
What are some of the problems involved with the use of profit maximization as the goal of the firm How does the goal of maximization of shareholder wealth deal with those problems?
Problems involved with the use of profit maximization as the goal of the firm due to numbers of reasons. 1 It ignore the timing of return. 2 It ignores the timing of returns. 3 It ignores the risk.
