MANAGEMENT

Detailed explanation-1: -So maximising wealth means maximising the value of each share. This objective is an universally accepted. (i) Wealth maximization is superior to the profit maximization because the main aim of the business concern under this concept is to improve the value or wealth of the shareholders.

Detailed explanation-2: -The main focus of profit maximization is on increasing the profit of the company while wealth maximization deals in raising the value of stakeholders in the company. The profit maximization theory is centered around the profit motive while wealth maximization looks at the wellbeing of all stakeholders.

Detailed explanation-3: -Wealth maximization is the idea that the firm’s primary objective should be to increase shareholder wealth. The basic premise of wealth maximization is that, over time, share prices will reflect a company’s true value and provide an accurate reflection of its success or failure.

Detailed explanation-4: -The objective of wealth maximization takes into accounta)Amount of returns expectedb)Timing of anticipated returnsc)Risk associated with uncertainty of returnsd)All of the aboveCorrect answer is option ‘D’.