Which businesses maximize shareholder value? Which do not? When is shareholder maximization the right goal for management and when shareholder maximization is the wrong goal for management to have?
Welch I. (2009). Corporate Finance: An Introduction. Upper saddle River NJ: Prentice-Hall
An example of when shareholder maximization is the right role for management is in a situation when a company such as Walmart seeks to gain maximum profitability in order to increase the value of its stock and shares, which inevitably leads to a maximization of shareholder profitability. Shareholder maximization is the right role for management in this situation, due to the fact that this is a retail business that is seeking maximum profitability, and ...