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    Maximizing Shareholder Return

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    Maximizing shareholder returns usually implies that the firm must also satisfy customers, employees, suppliers, creditors and other stakeholders. First, rank stakeholders as to expected risk and return and then rank stakeholders as to their importance to the organization's success. Explain your ranking differences and/or similarities.

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    Solution Preview

    First, rank stakeholders as to expected risk and return:

    1. Investors

    2. Creditors

    3. Suppliers

    4. Employees

    5. Customers

    6. Misc. stakeholders

    - In this case, our investors have the biggest risk and return in the company because the company's operations are largely funded with the investors' money as a source of working capital. If the company is not managed properly, the investors have the most to lose. The creditors ...

    Solution Summary

    Maximizing shareholder returns usually implies that the firm must also satisfy customers, employees, suppliers, creditors and other stakeholders. First, rank stakeholders as to expected risk and return and then rank stakeholders as to their importance to the organization's success. Explain your ranking differences and/or similarities.

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