#cfa #cfa-level-1 #economics #lol #microeconomics #reading-15-demand-and-supply-analysis-the-firm #section-2-objectives-of-the-firm #study-session-4
Finance experts frequently reconcile profitability and risk objectives by stating that the objective of the firm is, or should be,
shareholder wealth maximization (i.e., to maximize the market value of shareholders’ equity)
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2. OBJECTIVES OF THE FIRMen be classified as focused on profitability (e.g., maximizing profits, increasing market share) or on controlling risk (e.g., survival, stable earnings growth); and c) managers in different countries may have different emphases.
<span>Finance experts frequently reconcile profitability and risk objectives by stating that the objective of the firm is, or should be, shareholder wealth maximization (i.e., to maximize the market value of shareholders’ equity). This theory states that firms try, or should try, to increase the wealth of their owners (shareholders) and that market prices balance returns against risk. However, complex corporate Summary
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