in what ways is the wealth maximization objective superior to profit maximization objective

Wealth maximization main aim is to improve the market value where as in profit maximization it is making large amount of profit. Explain.Q2 What is capital budgeting? Wealth maximization is superior to the profit maximization because the main aim of the business concern under this concept is to ... it is important to understand that profit maximisation as a goal, in a way, leads to wealth maximisation. The traditional approach of financial management had many limitations: 1.Business may have several other objectives other than profit maximization… In wealth maximization objective is almost universally accepted goal of a firm, manager should take decisions that helps in maximization of the shareholders' wealth. On the other hand, the ability of the company in increasing the value of its stock in the market is known as wealth maximization. This article compiles all the important differences between profit maximization and wealth maximization, both in tabular form and points. In what ways is the wealth maximization objective superior to the profit maximization objective Get the answers you need, now!

Answer (1 of 2): The traditional approach of financial management had many limitations: 1.Business may have several other objectives other than profit maximization.Companies may have goals like: A larger market share, high sales,greater stability and so on.The traditional approach did not take into account so many of these other aspects. The traditional approach of financial management was all about profit maximization.The main objective of companies was to make profits. The company will usually adjust influential factors such as production costs, sale price, and output levels as a way of reaching its profit goal. Why is it significant for a firm?Q3 Explain the factors influencing working capital policy of a firm.Q4 How Finance function is related to investment function, explain different functions performed by a financemanager.Q5 ‘Generally … The objective of a Financial Management is to design a method of operating the Internal Investment and financing of a firm. The process through which the company is capable of increasing is earning capacity is known as Profit Maximization. PROFIT MAXIMIZATION Profit Maximization is the traditional approach, in this process Companies undergo to Determine the best Output and price levels in order to maximize its return.

SECTION A:Q1 In what ways is the wealth maximization objective superior to the profit maximization objective.