Discussion

Explain why “maximization of shareholders’ wealth” is the appropriate ultimate, long-term goal of a firm.

Instructions: The minimum expectation for class discussions is to respond directly to each part of the

discussion prompt and to respond to at least two other posts, either by a student or instructor, by the end

of the week: 1. Submit one main post responding directly to each part of the discussion prompt. This should

be a substantive response to the topic(s) in your own words, referencing what you have discovered in your

required reading and other learning activities. 2. Reply to at least two posts. Responses can be made to

students or to your instructor. 3. Responses to other individuals’ posts should: Expand on their ideas

Discuss the differences between your thoughts and theirs Explain why you agree or disagree 4. Students must

make reference or provide credit to the sources used If one paragraph could just be in response to this

post. Maximization of Shareholders Wealth is the appropriate long-term goal of a firm because to state

profit maximization as a clear goal does not account for the problems of uncertainty of returns on

investments or timing of returns. Wealth maximization is reflected in the market price of shares in the

company. A company that’s shareholders are seeing increasing net cash flow on their investments have a

positive net present value. A long-term goal allows a firm to show a steady increase in value on returns for

investors as opposed to looking a the individual investments made in the market which are liable to

fluctuate. Shareholders are seeing the compensation for their contributions to the firm. This makes the firm

a valuable investment and therefore increases it’s wealth.

PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A GOOD DISCOUNT