Stockholder Wealth Maximization

Discuss the common goal of stockholder wealth maximation and the intrusion this lav have on a monetary manager. Ultimately, it would seem that the financial managers goal should be the maximation of profits which also ensures the stockholder wealth maximization. The more(prenominal) the checks revenues and profits increase, the greater the dividends enjoyed by the stockholders. solar daylight to day decisions made by the financial manager solve revenues and impact the stockholders value both positively and negatively. According to Foundations of pecuniary Management, sh atomic number 18holder wealth maximization is defined as achieving the highest manageable value for the business satisfying (Block, Hirt, Danielsen, 2009, p. 12). Additionally, the financial manager throw out non control nor call up the firms stock price. The financial manager must(prenominal) be able to envision the best result that impart positively affect the stock price and encourage foo d commercialise confidence for long-term investment. Investor decisions must weigh the outlook involving let out and return. The greater the risk involved, generally the greater return that can be achieved. By judging the financial managers decisions for long-term investment, a stockholder is able to ascertain the likelihood of the firms ability to continue to increase profitability.

This makes the financial managers decision-making task even more gnarly due to the fact that not all market factors are able to be predicted, much less predicted accurately (Block, Hirt, Danielsen, 2009, p. 13). grant maximization or wealth maximization refers to the amount of currency made by a fir m (Wiki Answers, 2009). If a firm makes a la! rge amount of profit yet does not do so in an efficient manner, the wealth maximization is not met and the shareholder wealth is not maximized because the market gift be able to witness the inefficiency (Block, Hirt, Danielsen, 2009, p. 12). References Block, Stanley B., Hirt, Geoffrey A., & Danielsen, Bartley R. (2009). Foundations of financial management (13th...If you fate to get a full essay, order it on our website: OrderEssay.net

If you want to get a full information about our service, visit our page: write my essay