A decision that increases immediate net profit is always consistent with maximizing shareholder wealth.

Question

Quizplus · Accepted Answer

Maximizing shareholder wealth takes into account not only immediate net profit, but also long-term profitability and sustainability. A decision that only focuses on immediate net profit may not be the best for the long-term success and growth of the company, and therefore may not maximize shareholder wealth in the long run.

A Decision That Increases Immediate Net Profit Is Always Consistent