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Financial mangement (mgt201)..........Gdb no 1.........(Start date : 12 may 2016......End date : 18 may 2016)........Mark : 5

Learning objectives:

  • To make the students learn difference between objective of profit maximization and shareholders’ wealth maximization.
  • To make the students learn significance of shareholders’ wealth maximization objective for a company.

Learning outcome:

  • After doing this activity, students will be able to differentiate the significance of both objectives for a company.



“A company’s objective of profit maximization may not always maximize Shareholders wealth”. Do you agree? Give only three logical reasons.



  • Answer must be given in bulleted form only.
  • Answer must NOT exceed 100 words.
  • Do not copy or exchange your answer with other students. Two identical/copied comments will be marked Zero (0) and may damage your grade in the course.
  • Obnoxious or ignoble answer should be strictly avoided.
  • Questions/queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB is over.

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Replies to This Discussion

Friends share your thoughts and ideas for this gdb ....thanks

Please Discuss here about this GDB.Thanks
Our main purpose here discussion not just Solution
We are here with you hands in hands to facilitate your learning and do not appreciate the idea of copying or replicating solutions.

profit maximization k sath hmesha share holder ki wealth maximize q nahi hoti.....??????????

o das dio

  1. The process through which the company is capable of increasing is earning capacity is known as Profit Maximization. On the other hand, the ability of the company in increasing the value of its stock in the market is known as wealth maximization.
  2. Profit maximization is a short term objective of the firm while long term objective is Wealth Maximization.
  3. Profit Maximization ignores risk and uncertainty. Unlike Wealth Maximization, which considers both.
  4. Profit Maximization avoids time value of money, but Wealth Maximization recognizes it.
  5. Profit Maximization is necessary for the survival and growth of the enterprise. Conversely, Wealth Maximization accelerates the growth rate of the enterprise and aims at attaining maximum market share of the economy.

good work

o zalim logoooooo koi to ao medaaan ma

Gud work and points. but i think we have to explain something more not difference of these two.we have to tell,is profit maximization not always increase shareholder wealth?so logic reasons explain krni hen k why.plz explain anyone

yup yehi to smj nai raha koi ye explain kr dy q k mujy b samj nai a rhi kuch

A company may be able to increase profits by cutting on outlays for maintenance or staff training but that will not add value in shareholders  wealth at all.

es trh k points dhonden studnts sochen plz kch sary.


simple sa iss question ka matlab hai .....k companies jo k profit ko zaida say zaida  karna chahti hain ...un ki shahid  hamesha  yeh gharz nahin hoti k hamray saath saath share holders ki wealth bi bharhay ........to kya app iss bat per raza mand hotay hain ??? ,...iss ki simple si 3 reasons  likhni hai .....100 wrds say uper aap ka gdb nahin hona chahye


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