SlideShare a Scribd company logo
4
Most read
11
Most read
13
Most read
Strategies to maximize shareholders wealth
What is meant by share holder wealth maximization?
Shareholder wealth maximization means when manager of a
company tries to maximize the wealth of their firms.
So, basically they increase the share price of that company.
And with it the shareholders wealth and firm’s value
increases with increase in its share price.
How to maximize their wealth?
Somewhere it is critical to maximize the wealth of the
shareholder. It possess a determinant importance with the
failure and success of the organization.
Maximization of share holders wealth holds key functions that
helps in generating profits for the organization.
By doing this the company generally increase their share price
(Stout, 2012).
How to maximize Shareholders wealth
Company tries to explores ways through which they can
increase the wealth, this can be done by investing, by being
profitable, and assessing the cash smartly, generate wealth
for the company and shareholders (Stout, 2012).
For profit maximization general techniques and procedures
followed by the organization include placing the resources
into ventures or land, structuring their credits, and by
boosting the costs of their stocks (Queen, 2015).
Regardless of the measure whether it is quantifiable profit,
development, benefit, comparable measurement, companies
generally search for the opportunities through which they
can enhance the execution in their business. This thing led to
increase in the wealth of the shareholders.
Rather than this there are many procedures with whose help
the company can raise more wealth (Queen, 2015).
Approaches to increase the wealth of the shareholder
1. Rise in Unit Price:
By rising the prices of the item, by accepting that the company
will continuously sell on total that is related, or by selling it n
higher prices, these are the things that hep the company in
generating more wealth and profit.
There are various obstructions involved in this technique like,
actual value that is set by the customers, price that is indicated
by the competitors.
2. By selling additional units
If the company possess fixed prices, or if they raise fixed costs
at a ratio which comparatively less than the sales growth then it
will help in diminishing the price per unit.
And can become an addition in the wealth of the shareholder.
Or it can be done by selling additional items, this will directly
affect the profits of the shareholders (Sharfman, 2014).
To catch prominent shares in the market the company
should include practicality and features that can help in
surpassing the competitor.
It can be done by offering value added services, or by
delivering orders quickly.
There are various plans and techniques that can help in
gaining growth in sales and are used to magnify the growth
related to sales (Denis, 2016).
And lead to increase in the wealth of the shareholder.
3. By increasing use of fixed cost
To increase the fixed cost the company need to sell more
items along with the regular matter that is related with
lessening the fixed cost per unit.
By increasing the sales of greater products by keeping the
fixed cost constant the company can justifying and joining
their fixed costs (Sharfman, 2014).
4. By doing reduction in the unit price
Diminishing the unit is extensively and greatest known
wealth formation plan cost of the shareholder.
It is usually done for the profitable purpose and work as the
focal point for the improvement of actions.
There is a extended progress strategy i.e. rundown and some
tools that lead to decrease in the price.
Techniques that are used to measure wealth of shareholder’s
The wealth of the shareholder can be assessed by approximation
of market based on the common stock possessions of the
stakeholders.
1. To calculate the wealth of the shareholder, start it by
deducting the preferred profits of the organisation from the
total income.
2. To calculate the profit of the organisation, divide the current
income of the organization with total no. of shares.
3. To the profit per share add stock cost.
Why does this matter?
Wealth maximization is based on the long term objective
used for amplifying the wealth of the shareholder by
expanding business estimation that is directed by company.
They are the owners of the company and if the organisation
progress well then then the gains of the stakeholders also
increases. It is the vital objective of the organisation.
Advantages related to maximization of wealth
1. It does not depends on the profits.
2. It depends on the income
3. It is more superior then the expansion of wealth
4. It generally focuses on the risk factors while providing
discounts (Denis, 2016).
Disadvantages related to maximization of wealth
1. It is a descriptive idea and not perspective idea
2. When management and ownership are separated then
create difficulties.
3. The objectives that are related to it are unclear.
Conclusion
The most significant objective of the organization is to boost
the wealth of the shareholder.
A successful manager is more thoughtful towards the
methods that are essential for generating benefits in the
organization. The basic benefit is to needed to build profits
that are very commonly paid with every stock that is
common and establishes the wealth of shareholder.
References
Denis, D. (2016). Corporate governance and the goal of the firm: In defense of
shareholder wealth maximization. Financial Review, 51(4), 467-480.
Queen, P. E. (2015). Enlightened shareholder maximization: is this strategy
achievable?. Journal of Business Ethics, 127(3), 683-694.
Stout, L. A. (2012). New Thinking on" Shareholder Primacy". Accounting, Economics,
and Law, 2(2).
Sharfman, B. S. (2014). Shareholder wealth maximization and its implementation
under corporate law. Fla. L. Rev., 66, 389.

More Related Content

PPT
Financial Management
DOCX
Running head STRATEGIC FIT OF THE FIRM ASSESSMENT .docx
DOCX
Assignment
DOCX
Running Head SWOT ANALYSIS AND STRATEGIC SCORECARD1SWOT ANA.docx
PPTX
Principle of management
DOCX
Internal assignment no 2(MBA208)BY ANIL KUMAR
DOCX
Value Creation And Measurment.docx
PPTX
Financial Management-2
Financial Management
Running head STRATEGIC FIT OF THE FIRM ASSESSMENT .docx
Assignment
Running Head SWOT ANALYSIS AND STRATEGIC SCORECARD1SWOT ANA.docx
Principle of management
Internal assignment no 2(MBA208)BY ANIL KUMAR
Value Creation And Measurment.docx
Financial Management-2

Similar to Strategies to Maximize Shareholders Wealth by Zomak Assignments (20)

PPTX
PPTX
TYPES OF STRATEGIES.pptx
PPTX
Chapter 1 FM .pptx
PDF
Introduction of Financial management.pdf
PPT
07.strategic alternatives
PDF
Ch 1 pdf
DOCX
LIBRARY RESEARCH ASSIGNMENTFROM XXX XXX STUDENT NUMBER 9.docx
DOCX
Financial management
PPTX
Financial Management - Objectives
PPTX
Chapter 3 grand strategy
PPTX
Chapter 3 grand strategy
PPT
1. Introduction to Financial Management.ppt
PPTX
Introduction to Financial Management
DOCX
INTEGRATIVE PROJECT BALANCED SCORECARD & THE FINANCIAL PERSPECTIV.docx
PDF
STRATEGIC MANAGEMENT.pdf
PDF
ppt_sm.pdfppt_sm.pdfppt_sm.pdfppt_sm.pdf
PDF
Valuation of Startups [with limitation of traditional valuation approach]
PDF
Valuation of Startups [with limitation of traditional valuation approach]
PPTX
Time Value of money_Revised_Chapter 20.pptx
PPTX
AN OVERVIEW TO FINANCIAL MANAGEMENT WEEK 1. 6000B (1) (2).pptx
TYPES OF STRATEGIES.pptx
Chapter 1 FM .pptx
Introduction of Financial management.pdf
07.strategic alternatives
Ch 1 pdf
LIBRARY RESEARCH ASSIGNMENTFROM XXX XXX STUDENT NUMBER 9.docx
Financial management
Financial Management - Objectives
Chapter 3 grand strategy
Chapter 3 grand strategy
1. Introduction to Financial Management.ppt
Introduction to Financial Management
INTEGRATIVE PROJECT BALANCED SCORECARD & THE FINANCIAL PERSPECTIV.docx
STRATEGIC MANAGEMENT.pdf
ppt_sm.pdfppt_sm.pdfppt_sm.pdfppt_sm.pdf
Valuation of Startups [with limitation of traditional valuation approach]
Valuation of Startups [with limitation of traditional valuation approach]
Time Value of money_Revised_Chapter 20.pptx
AN OVERVIEW TO FINANCIAL MANAGEMENT WEEK 1. 6000B (1) (2).pptx
Ad

More from zomakassignments (14)

PPTX
DMGS_SSK_18663 R2.pptx by Zomak Assignments
PPTX
Ryan Jarvis - London Teacher Who Secretly Recorded by Zomak Assignments
PPTX
Marketing a New Boutique Resort.pptx by Zomak Assignments
PPTX
BSBSTR502.pptx by Zomak Assignments
PPTX
MATH1206 by Zomak Assignments
PPTX
New Forest Natural Park by Zomak Assignments
PPTX
Diversity Implementation Plan by Zomak Assignments
PPTX
BSBWHS411.pptx by Zomak Assignments
PPTX
Assessment 3 BUS5002 by Zomak Assignments
PPTX
Assessment 5 - Presentation Research Proposal by Zomak Assignments
PPTX
Manage Diversity by Zomak Assignments
PPTX
Overcoming Problems of Intangibility and Perceived Risks.pptx
PPTX
BSBCMM511.pptx
PPTX
risk management process.pptx
DMGS_SSK_18663 R2.pptx by Zomak Assignments
Ryan Jarvis - London Teacher Who Secretly Recorded by Zomak Assignments
Marketing a New Boutique Resort.pptx by Zomak Assignments
BSBSTR502.pptx by Zomak Assignments
MATH1206 by Zomak Assignments
New Forest Natural Park by Zomak Assignments
Diversity Implementation Plan by Zomak Assignments
BSBWHS411.pptx by Zomak Assignments
Assessment 3 BUS5002 by Zomak Assignments
Assessment 5 - Presentation Research Proposal by Zomak Assignments
Manage Diversity by Zomak Assignments
Overcoming Problems of Intangibility and Perceived Risks.pptx
BSBCMM511.pptx
risk management process.pptx
Ad

Recently uploaded (20)

PDF
Solara Labs: Empowering Health through Innovative Nutraceutical Solutions
PDF
Charisse Litchman: A Maverick Making Neurological Care More Accessible
PDF
NewBase 12 August 2025 Energy News issue - 1812 by Khaled Al Awadi_compresse...
PDF
How to Get Approval for Business Funding
PDF
Ôn tập tiếng anh trong kinh doanh nâng cao
PPT
Lecture 3344;;,,(,(((((((((((((((((((((((
PDF
TyAnn Osborn: A Visionary Leader Shaping Corporate Workforce Dynamics
PDF
Tata consultancy services case study shri Sharda college, basrur
PDF
NISM Series V-A MFD Workbook v December 2024.khhhjtgvwevoypdnew one must use ...
PDF
BsN 7th Sem Course GridNNNNNNNN CCN.pdf
PPTX
3. HISTORICAL PERSPECTIVE UNIIT 3^..pptx
PDF
Cours de Système d'information about ERP.pdf
PDF
Building a Smart Pet Ecosystem: A Full Introduction to Zhejiang Beijing Techn...
PDF
pdfcoffee.com-opt-b1plus-sb-answers.pdfvi
PPTX
Board-Reporting-Package-by-Umbrex-5-23-23.pptx
PDF
Outsourced Audit & Assurance in USA Why Globus Finanza is Your Trusted Choice
PDF
NEW - FEES STRUCTURES (01-july-2024).pdf
PPTX
svnfcksanfskjcsnvvjknsnvsdscnsncxasxa saccacxsax
PDF
Digital Marketing & E-commerce Certificate Glossary.pdf.................
PPTX
sales presentation، Training Overview.pptx
Solara Labs: Empowering Health through Innovative Nutraceutical Solutions
Charisse Litchman: A Maverick Making Neurological Care More Accessible
NewBase 12 August 2025 Energy News issue - 1812 by Khaled Al Awadi_compresse...
How to Get Approval for Business Funding
Ôn tập tiếng anh trong kinh doanh nâng cao
Lecture 3344;;,,(,(((((((((((((((((((((((
TyAnn Osborn: A Visionary Leader Shaping Corporate Workforce Dynamics
Tata consultancy services case study shri Sharda college, basrur
NISM Series V-A MFD Workbook v December 2024.khhhjtgvwevoypdnew one must use ...
BsN 7th Sem Course GridNNNNNNNN CCN.pdf
3. HISTORICAL PERSPECTIVE UNIIT 3^..pptx
Cours de Système d'information about ERP.pdf
Building a Smart Pet Ecosystem: A Full Introduction to Zhejiang Beijing Techn...
pdfcoffee.com-opt-b1plus-sb-answers.pdfvi
Board-Reporting-Package-by-Umbrex-5-23-23.pptx
Outsourced Audit & Assurance in USA Why Globus Finanza is Your Trusted Choice
NEW - FEES STRUCTURES (01-july-2024).pdf
svnfcksanfskjcsnvvjknsnvsdscnsncxasxa saccacxsax
Digital Marketing & E-commerce Certificate Glossary.pdf.................
sales presentation، Training Overview.pptx

Strategies to Maximize Shareholders Wealth by Zomak Assignments

  • 1. Strategies to maximize shareholders wealth
  • 2. What is meant by share holder wealth maximization? Shareholder wealth maximization means when manager of a company tries to maximize the wealth of their firms. So, basically they increase the share price of that company. And with it the shareholders wealth and firm’s value increases with increase in its share price.
  • 3. How to maximize their wealth? Somewhere it is critical to maximize the wealth of the shareholder. It possess a determinant importance with the failure and success of the organization. Maximization of share holders wealth holds key functions that helps in generating profits for the organization. By doing this the company generally increase their share price (Stout, 2012).
  • 4. How to maximize Shareholders wealth Company tries to explores ways through which they can increase the wealth, this can be done by investing, by being profitable, and assessing the cash smartly, generate wealth for the company and shareholders (Stout, 2012). For profit maximization general techniques and procedures followed by the organization include placing the resources into ventures or land, structuring their credits, and by boosting the costs of their stocks (Queen, 2015).
  • 5. Regardless of the measure whether it is quantifiable profit, development, benefit, comparable measurement, companies generally search for the opportunities through which they can enhance the execution in their business. This thing led to increase in the wealth of the shareholders. Rather than this there are many procedures with whose help the company can raise more wealth (Queen, 2015).
  • 6. Approaches to increase the wealth of the shareholder 1. Rise in Unit Price: By rising the prices of the item, by accepting that the company will continuously sell on total that is related, or by selling it n higher prices, these are the things that hep the company in generating more wealth and profit. There are various obstructions involved in this technique like, actual value that is set by the customers, price that is indicated by the competitors.
  • 7. 2. By selling additional units If the company possess fixed prices, or if they raise fixed costs at a ratio which comparatively less than the sales growth then it will help in diminishing the price per unit. And can become an addition in the wealth of the shareholder. Or it can be done by selling additional items, this will directly affect the profits of the shareholders (Sharfman, 2014).
  • 8. To catch prominent shares in the market the company should include practicality and features that can help in surpassing the competitor. It can be done by offering value added services, or by delivering orders quickly. There are various plans and techniques that can help in gaining growth in sales and are used to magnify the growth related to sales (Denis, 2016). And lead to increase in the wealth of the shareholder.
  • 9. 3. By increasing use of fixed cost To increase the fixed cost the company need to sell more items along with the regular matter that is related with lessening the fixed cost per unit. By increasing the sales of greater products by keeping the fixed cost constant the company can justifying and joining their fixed costs (Sharfman, 2014).
  • 10. 4. By doing reduction in the unit price Diminishing the unit is extensively and greatest known wealth formation plan cost of the shareholder. It is usually done for the profitable purpose and work as the focal point for the improvement of actions. There is a extended progress strategy i.e. rundown and some tools that lead to decrease in the price.
  • 11. Techniques that are used to measure wealth of shareholder’s The wealth of the shareholder can be assessed by approximation of market based on the common stock possessions of the stakeholders. 1. To calculate the wealth of the shareholder, start it by deducting the preferred profits of the organisation from the total income. 2. To calculate the profit of the organisation, divide the current income of the organization with total no. of shares. 3. To the profit per share add stock cost.
  • 12. Why does this matter? Wealth maximization is based on the long term objective used for amplifying the wealth of the shareholder by expanding business estimation that is directed by company. They are the owners of the company and if the organisation progress well then then the gains of the stakeholders also increases. It is the vital objective of the organisation.
  • 13. Advantages related to maximization of wealth 1. It does not depends on the profits. 2. It depends on the income 3. It is more superior then the expansion of wealth 4. It generally focuses on the risk factors while providing discounts (Denis, 2016).
  • 14. Disadvantages related to maximization of wealth 1. It is a descriptive idea and not perspective idea 2. When management and ownership are separated then create difficulties. 3. The objectives that are related to it are unclear.
  • 15. Conclusion The most significant objective of the organization is to boost the wealth of the shareholder. A successful manager is more thoughtful towards the methods that are essential for generating benefits in the organization. The basic benefit is to needed to build profits that are very commonly paid with every stock that is common and establishes the wealth of shareholder.
  • 16. References Denis, D. (2016). Corporate governance and the goal of the firm: In defense of shareholder wealth maximization. Financial Review, 51(4), 467-480. Queen, P. E. (2015). Enlightened shareholder maximization: is this strategy achievable?. Journal of Business Ethics, 127(3), 683-694. Stout, L. A. (2012). New Thinking on" Shareholder Primacy". Accounting, Economics, and Law, 2(2). Sharfman, B. S. (2014). Shareholder wealth maximization and its implementation under corporate law. Fla. L. Rev., 66, 389.