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3. Profit maximization is not wealth maximization –
Discuss briefly by giving appropriate examples.
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Answer Posted / vipin bhardwaj
profit maximisation does not consider risk and time
value.On the other hand wealth maximisation consider risk
and time value of money.Profit maximisation objective is
good in short run , while wealth maximisation is best in
long run projects.The shareholders of organisation prefer
wealth maximisation over profit maximisation.Wealth
maximisation means maximise the share price of any
organisation.
Wealth maximisation consider eps,dividend paYment in
advance.While profit maximisation does not consider it.
| Is This Answer Correct ? | 54 Yes | 11 No |
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