difference between shareholder wealth maximization or profit

Coming to Shanghai to do business? This forum is for you to ask questions about anything from jobs to business culture

difference between shareholder wealth maximization or profit

Postby morrisseytimmy » Mon Aug 06, 2012 2:08 pm

hello friends,
Profit maximization typically is defined as a more static concept than shareholder wealth maximization.
Shareholder wealth is the market value of the firm's common stock. Shareholder wealth is calculated as the number of common shares outstanding times the market price per share .




Commercial Truck Scales
Last edited by morrisseytimmy on Fri Oct 04, 2013 11:48 am, edited 1 time in total.
morrisseytimmy
Newbie
 
Posts: 7
Joined: Thu Aug 02, 2012 2:43 pm

Re: difference between shareholder wealth maximization or pr

Postby garyquinlan008 » Mon Aug 06, 2012 9:01 pm

In Shareholder Wealth you are forgetting the Dividends received and the fact that the Dividends can be invested to create additional wealth for the Shareholder.
The resident idiot kamala is so easy to hit for six, it is somewhat tedious!!
User avatar
garyquinlan008
Board Royalty
Board Royalty
 
Posts: 6522
Mood: Cool
Joined: Sun Jan 08, 2012 6:10 pm
Location: Planet Earth

Re: difference between shareholder wealth maximization or pr

Postby btravers33 » Mon Aug 06, 2012 11:09 pm

This is true, but the popular consensus is that future dividend receipts are priced into the value of the stock. To be honest though, who knows anymore. I can't believe markets are truly efficient, they are now totally manipulated by the large financial institutions.

By the way, morisseytimmy, are these meant to be just random fun facts or will this all eventually come together at some point?
A state which dwarfs its men, in order that they may be more docile instruments in its hands—even for beneficial purposes—will find that with small men no great thing can really be accomplished. - J.S. Mill
User avatar
btravers33
Veejay
Veejay
 
Posts: 1904
Mood: Scream
Joined: Wed Jan 26, 2011 2:59 pm
Location: State of Confusion

Re: difference between shareholder wealth maximization or pr

Postby tylerdurden » Tue Aug 07, 2012 12:04 am

They will come together at some point, when he hands in his Middle School IT assignment complete with screen shots.
In explaining any human shortcoming, the first tool I reach for is Hanlon's Razor: Never attribute to malice that which is adequately explained by stupidity.
- Steven Pinker
User avatar
tylerdurden

Ground Zero

Board Royalty
Board Royalty
 
Posts: 6643
Mood: Happy
Joined: Tue Feb 22, 2011 3:32 pm

Re: difference between shareholder wealth maximization or pr

Postby Misteral » Tue Aug 07, 2012 3:07 am

Good one, Tyler
User avatar
Misteral
LoopKicker
LoopKicker
 
Posts: 940
Joined: Thu Jul 24, 2008 9:23 am


Return to Business & Jobs

 


  • Related topics
    Replies
    Views
    Last post

Who is online

Users browsing this forum: No registered users and 0 guests