BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Difference Between Wealth and Profit Maximization. Wealth Maximization consists of activities that manage the financial resources to increase the stakeholders’ value. In contrast, Profit Maximization consists of the activities that manage the financial resources intending to increase the Company’s profitability.

Detailed explanation-2: -Shareholders wealth maximization criterion proposes that a business concern should only consider the decisions that maximize the market value of the share or the shareholders’ wealth. The market value of share is treated as an indicator of efficiency and effectiveness of the firm.

Detailed explanation-3: -Shareholder wealth maximization means that a company’s primary goal is raising its stock price. Shareholder wealth maximization can be a good thing because it gives a firm’s managers a clear objective that builds value.

Detailed explanation-4: -At its most basic level, maximizing profits and ultimately stock prices depend on increasing revenues and decreasing costs associated with the products or services sold. Good management will produce earnings and industry growth, which will boost firm-specific sales.