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

What is meant by the goal of maximization of shareholder wealth?
SocratesRedux Answered Most Recently
Suppose a stock holder buys a stock at $10 and in ten years time the market price of stock shoots up to $55.This is called maximizing shareholders capital.From Barry D.Maximizing Sharholder Wealth refers to the process by which executives in a pulically-owned company, usually, (but also to private companies with shareholders), undertake investing in new projects, maximizing profits from existing products and services, controlling costs, and adding "value" to the company through the process, which hopefully gets reflected in the price of the stock, but alwasy in the increase in Net Asset Value and Equity Per Share.Sometimes simply selling the company for a premium over the existing price or Asset Value results in Maximizing ShareholderWealth.Hope this helps, Barry
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