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Profit maximization vs wealth maximization 58,731 views Share Like Download ...
Broadly, there are two alternative objectives that a business firm can pursue Profit Maximization Wealth Maximization
Arvinderpal Kaur, -Follow Published on Jul 15, 2015
A simple and comprehensive presentation on Profit maximization v/s Wealth ... Published in: Education
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Full Name Comment goes here. 12 hours ago Delete Reply Block Are you sure you want to Yes No Profit Maximization S It is a term which denotes the maximum profit to be earned by an organization in a given period of t... Your message goes here
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Sanjay Borad , Owner/Partner at Vodafone Essar Ltd. You can refer the following link also for great insight. https://efinancemanagement.com/financial-management/profit-vs-wealth-maximization 8 months ago Reply Are you sure you want to Yes No Your message goes here
DigitalEssay.Net at DigitalEssay.Net If you’re struggling with your course work and are looking for an easier way out I’d recommend taking the approach I took with my AP US history class. I ordered papers from Digitalessay.net and picked a writer to write my essays for me. It worked great! A definite recommendation. 1 year ago Reply Are you sure you want to Yes No Merits of Profit Maximization S Best Criterion on decision making. S Efficient allocation of resources. S Optimum utilizat... Your message goes here
Muktar Mohamed Abdulahi , Student at Simad University thank you! 1 year ago Reply Are you sure you want to Yes No Your message goes here
VADDIPARTHI SRI SURYALAXMI , Student at ANDHRA LOYOLA COLLEGE 1 day ago
Muralidharan Sridharan 2 days ago
Navjivika Arora 6 days ago Drawbacks of Profit Maximization S It ignores time value of money. S It is vague conceptually. S It ignores the risk facto... Muruga vel , St. Joseph college 1 week ago
Shivam Singh , Law Student at Lovely Professional University at Lovely Professional University 2 weeks ago Show More No Downloads Views Total views 58,731 On SlideShare 0 From Embeds 0 Number of Embeds 40 Actions Shares 0Wealth Maximization S Fundamental objective of wealth maximization is to maximize the market value of the firm’s shares. S... Downloads 1,053 Comments 3 Likes 81 Embeds 0 No embeds No notes for slide
Profit maximization vs wealth maximization 1. 1. S Profit maximization VS Wealth maximization -The conflict 2. 2. Broadly, there are two alternative objectives that a business firm can pursue Profit Maximization Wealth Maximization 3. 3. Profit Maximization S It is a term which denotes the maximum profit to be earned by an organization in a given period of time. S The profit maximization goal implies that the Investment, Financing and Dividend decisions of the enterprise should be oriented to profit maximization. 4. 4. Merits of Profit Maximization S Best Criterion on decision making. S Efficient allocation of resources. S Optimum utilization. 5. 5. Drawbacks of Profit Maximization S It ignores time value of money. S It is vague conceptually. S It ignores the risk factor. S It may tempt to make such decisions which may in the long run prove disastrous. S Its emphasis is generally on Short run projects. S In the new business environment Profit maximization is regarded as unrealistic, difficult, inappropriate and immoral. 6. 6. Wealth Maximization S Fundamental objective of wealth maximization is to maximize the market value of the firm’s shares. S Maximizes the net present value of a course of action to the shareholders. S Accounts for the timing and risk of expected benefits. S Benefits are measured in terms of cash flows. 7. 7. Merits of Wealth Maximization S The wealth maximization objective takes care of the: Shareholder’s interest lender’s or creditor’s interest Worker’s or employees’ interest Merits of Wealth Maximization S The wealth maximization objective takes care of the: Shareholder’s interest lender’s o... It also ensures fair return to the shareholders, building up reserves for growth and expansion, ensuring financial discipline in the management. 8. 8. Merits of Wealth Maximization S It focuses on the long term. S It takes into account the time value of money. S It considers risk. S It maintains market price of the shares of the organization. S It recognizes the value of regular dividend payments. 9. 9. Conflict Profit Maximization S Its main objective is to earn large amount of profits. S It emphasizes short term S It ignores time value of money. S It ignores risk and uncertainty. S It ignores timimg of return Wealth Maximization S Its main objective is to achieve highest market value of common stock. S It emphasizes long term S It considers time value of money. S It recognizes risk and uncertainty. S It recognizes the timings of return. 10. 10. Thank you Recommended
Merits of Wealth Maximization S It focuses on the long term. S It takes into account the time value of money. S It conside...
The Neuroscience of Learning Conflict Profit Maximization S Its main objective is to earn large amount of profits. S It emphasizes short term S It igno... Online Course - LinkedIn Learning
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