Maximization of shareholder wealth is a concept in which
A)increased earnings is of primary importance.
B)profits are maximized on a quarterly basis.
C)virtually all earnings are paid as dividends to common stockholders.
D)optimally increasing the long-term value of the firm is emphasized.

Question

Quizplus · Accepted Answer

Maximization of shareholder wealth emphasizes on optimally increasing the long-term value of the firm, taking into consideration the interests of all stakeholders, including shareholders, employees, customers, and suppliers. It is a long-term approach that focuses on sustainable growth and profitability rather than short-term gains. It does not necessarily entail paying out all earnings as dividends and recognizes the importance of reinvesting profits into the business for future growth and innovation.

Maximization of Shareholder Wealth Is a Concept in Which