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It's supposed to be a long term goal; but in the current markets short-term prices can raise stock values and get manager bonuses so they may bet tempted to go for more short term goals. Same thing for anyone preparing to sell their business and, for example, retire. Short term profits might get you a higher sal price, but the new buyer might find that that was at the cost of long term profits. For instance you raise short term profits by producing cheaper quality stuff at the same price, but lose customers for new owner down the road.
I believe shareholder wealth is very important in both short-term and long-term.
But, if you have opportunities to use funding to capitilise projects that have proven inflows of cash, management would probably go ahead with the project- delay dividends for the year to undergo the project and as a whole produce a higher:
-Cash inflow
-Stock price
-Possible dividends for the future years.
Therefore I believe short-term financing should be used to increase shareholder wealth in the long term as it is far more beneficial for both parties.
The goal of the corporation is profit maximization. It is both a short-term and long-term goal. However, this lends to myopic thinking on the part of most CEOs since they could be fired in the short-term for foregoing short-term gains to invest in long-term assets that will be a competitive advantage to the company.
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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?
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
Identify the various factors that can influence companys primary goal of maximizing shareholder wealth?
Identify the various factors that can influence a company's primary goal of maximizing shareholder wealth.
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
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
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.
The primary goal of a publicly owned corporation is to a.maximize dividends per share b.maximize shareholder wealth c.maximize earnings per share after taxes d.minimize shareholder risk e.trade goods?
maximize shareholder wealth
What is the goal of financial management?
To Maximize shareholder wealth.
Maximization of shareholder wealth as a goal is superior to profit maximization because?
it is operating cost
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.
Why is adjusting the WACC upwards consistent with the overall corporate goal of shareholder wealth maximization?
why? isn't it to adjust it downwards to max. shareholders wealth?
