Shareholders Wealth Maximization

Wealth

TABLE OF CONTENTS
Sl. No. Items Page
1. INTRODUCTION 3
2. MAXIMIZATION OF SHRAREHOLDERS WEALTH 4
3. MEASURES OF SHAREHOLDERS protect 6
4. SHAREHOLDER pass judgment CREATION MODEL 6
5. MANAGEMENTS V/S SHAREHOLDERS 8
6. SOCIAL RESPONSIBILITY AND SHAREHOLDERS WEALTH 9
7. FINANCIAL REPORTING AND SHAREHOLDERS VALUE 9
8. CONCLUSION 10
REFERENCES 11
3
1. INTRODUCTION
The nineteenth-century economist, J. B. Say states that an entrepreneur creates
value for society from shift resources to atomic number 18as of low productivity to areas of high
productivity thitherfore it can be argued that an entrepreneur not only creates value to
the company still also creates value to the society.
It is a common conniption that shareholders are the real owners of the plastered therefore the
authority of shareholders towards business is not a new notion. It is received wisdom
that the action of business and investment decisions should be taken by
keeping in view of maximizing the return to shareholders. Rappaport (1986), view is
that business strategies should be judged by scotch returns they generate for
their shareholders which are measured as dividend and increase in the share price.
Other strategies which management develop to create a competitive advantage
should also create greatest value to the shareholders.




Aswath (2001) discussed the reasons why the shareholder wealth maximation
prey should be the main objective of a firm.
1) Stock prices are the most observable by all measures which can be used to find
out the performance of the firm.
2) The rational investors reflect the long term effects of the firm decisions.
3) It is the trading of stocks through which gains can be realized. However where
there are arguments in favor of shareholder price maximization there are also voices
against this objective.
Kean (1979) believes that share price maximization objective as inappropriate and
presented a different view that appropriate goal for the company should be...If you want to get a full essay, order it on our website: Ordercustompaper.com



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