EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN: 9781337514835
Author: MOYER
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Question
Chapter 1, Problem 6QTD
Summary Introduction
To discuss: The reason why management have a tendency to to follow goals other than wealth maximization of shareholders.
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Why should shareholder wealth maximization be the overriding objective of the management?
How to encourage the managers to act in a way which is consistent with the objective of maximization of shareholder wealth?
Finance experts contend that the ultimate goal of a firm should be maximization of shareholder wealth. On the other hand, managers tend to pursue different goals. Discuss the concept of shareholder wealth maximization, the goals of management and the reasons for the goal differences.
Chapter 1 Solutions
EBK CONTEMPORARY FINANCIAL MANAGEMENT
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- Identify the conflict between the goal of shareholder wealth maximization and other stakeholder concerns (sometimes referred to as environmental, social, and governance (ESG) concerns).arrow_forwardWhy is it that the goal of financial management is maximization of shareholders’ wealth rather than maximization of profit?arrow_forwardHow do the shareholders of an organization can encourage its manager to act in a way which is consistent with the objective of maximization of shareholders' wealth?arrow_forward
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