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Q.

Why wealth maximization is superior to profit maximization in todays context? Justify your answer

Tags: money, education, science
Asked by Krishna Chaurasia, 10 Apr '10 08:16 pm
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Answers (2)

1.

1. Why wealth maximization is superior to profit maximization in todays context? Justify your answer
Answered by vikram bluey, 07 May '10 01:38 am

 
  
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Wealth maximation aims in maximising Shareholders wealth, employees wealth, profiting the external and internal parties of the firm, vendors, vendees, customers, investors, employers and all the parties interested in the benefit of the company.

Wealth maximation results in increased goodwill, branding and reputation of the company.

Where as profit maximation only deals with increased profits. Wealth maximation is a wider concept

In my answer, I'll assume by "profit" you mean "net income," since there are various types of profit (gross profit, operating profit, etc..).

In the long term, I really don't see how you could sustainably maximize shareholder wealth without maximizing net income, and vice versa.
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Answered by Tanmoy, 10 Jun '10 07:21 pm

 
  
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