The
Definition Of

Wealth maximization

Shareholders wealth maximization means maximization the net present value of a course of action to shareholders.

 According to Ezra Solomon,” Wealth maximization provide on unambiguous measure or what financial management should seek maximize, in making investment and financing decisions.”

According to I.M. Pandey,” Shareholders wealth maximization means maximization the net present value of a course of action to shareholders. The net present value of a course of action is the difference between the present value of its benefits and the present value of its costs.”

Share it:

More from this Section

  • Product cycle theory
    Product cycle theory refers to a theory suggesting that a firm initially establish itself locally and expand into foreign markets in response to foreign ...
  • Credit enhancement
    Credit enhancement is a contract in which a bank or other institution promises to back up the credit of another firm.
  • Discount rate method
    Discount rate method is the procedure used to assess interest on a loan in which interest is deducted up front at the beginning of the loan
  • Beneficiary
    Beneficiary is the seller or exporter in whose favour the documentary credit has been established.
  • Discount a Bill
    Discount a Bill is to discount a bill means to purchase a Bill of Exchange before it is due for payment for the amount estimated to be
  • Cash flow risk
    Cash flow risk is the danger that cash flows from a banking organization may fluctuate widely due to economic conditions, service
  • Corporate finance
    The department of a corporation which is involved with company’s financial activities is called "Corporate finance”.