View Merits Of Wealth Maximization Pictures. Wealth maximization objective helps in increasing the market value of shares. On the other hand, wealth maximization aim at increasing the value of the stakeholders.
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S efficient allocation of resources. A business with a wealth maximization strategy may develop new technologies, like 3d printers, that will not reach the market for a few years. The aim of any business is to maximize profitability and minimize losses.
So, the finance manager tries to give a maximum dividend to the shareholders.
Finance theory asserts that shareholders' wealth maximization is the single substitute for shareholders' utility. Both profit maximization and wealth maximization have the objective of increasing the net worth. Profit maximization has to be attempted with a realizations risk involved. shareholder's interest lender's or creditor's interest worker's or employees' interest it also ensures fair return to the shareholders, building up reserves for growth and expansion, ensuring.
