Maximization of shareholder wealth is not an accounting concept.A corporation's value should be based on
A)liquidation value
B)book value
C)market value
D)stock value

Question

Quizplus · Accepted Answer

Maximization of shareholder wealth is a financial concept that focuses on increasing the value of the corporation for its shareholders. Market value reflects the current perception of the corporation's future earnings potential and is therefore the most relevant measure of shareholder wealth maximization. Liquidation value and book value are accounting concepts that do not necessarily reflect the corporation's future earnings potential, while stock value is dependent on market value and not an independent measure of the corporation's value.

Maximization of Shareholder Wealth Is Not an Accounting Concept