Although profit maximization has long been considered as the main goal of a firm, shareholder wealth maximization
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Question:
Although profit maximization has long been considered as the main goal of a firm, shareholder wealth maximization is gaining acceptance amongst most companies as the key goal of a firm.
Required:
(i) Distinguish between the goals of profit maximization and shareholder wealth maximization.
ii) Explain three limitations of the goal of profit maximization.
iii) Describe three non-financial objectives that a company might pursue that have the effect of limiting the achievements of the financial objectives (6 Marks)
Related Book For
Fundamentals of corporate finance
ISBN: 978-0470876442
2nd Edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
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