What is meant by the goal of maximization of shareholder wealth?

Q: What are the advantages if any of being a privately held company?

A: A privately held company is a company which is not controlled by Government. These are companies…

Q: What other objectives that are important to a public limited company which are in-line with the…

A: A PLC denotes a firm that has issued equity to the general public. The purchasers of the shares are…

Q: What three policies under the firm’s control affect its cost of capital?

A: Cost of capital: It is the anticipated return required to form a capital budgeting venture…

Q: What are the financial effects of firm acquisitions?

A: Corporations will acquire or merge with a different company in expectations of advancing the growth…

Q: Discuss the ethics of dividends and illustrate how dividends and related issues (e.g. dividend…

A: Business is the part of the society and gets various resources from society to conduct its business.…

Q: Distinguish between paid-in capital and retained earningsof a corporation. Why is such a distinction…

A: Paid-in capital and retained earnings are the two main categories of stockholders' equity.

Q: What are some of the advantages of holding companies? Identify adisadvantage.

A: The advantages of holding company: Risk reduction: Large companies favor a structure of holding…

Q: What is meant by a shareholder’s preemptive right?

A: Common stock: These are the ordinary shares that a corporation issues to the investors in order to…

Q: Is it ethical to concentrate only on shareholder wealth, or should stakeholders as a whole be…

A: A stakeholder is any individual or group that has an interest or concern in an organization.…

Q: Identify which one of the following term is falling under the meaning of wealth maximization: a.…

A: Option Explanation a The government's Wealth is the wealth accrued to Government. b…

Q: What are the indicators of shareholder welfare?

A: Any person or company or any financial institute that holds the share of the company is referred to…

Q: What are holding companies? What are theiradvantages and disadvantages?

A: Holding companies: Holding company is a corporation that does not carried out any processes,…

Q: Identify the conflict between the goal of shareholder wealth maximization and other stakeholder…

A: Goal of shareholders wealth maximization is about focusing upon the owners of the company and…

Q: Shareholder wealth maximization and social responsibility – Is shareholder wealth maximization…

A: Shareholder wealth maximization and social responsibility are two important concepts in business and…

Q: Define shareholder's equity.

A: Financial accounting is the process of recording, summarizing, and reporting all the transactions in…

Q: Describe the sources of shareholder’s equity.

A: Stockholders’ equity or shareholder's equity:  The claims of owners on a company’s resources, after…

Q: Financial managers are responsible for decisions that maximize share price and shareholder9s wealth.…

A: The wealth of shareholders can be evaluated based on the total return they receive from holding a…

Q: Write down what are the disadvantages of shareholders equity?

A: Equity is one of the common sources to raise finance. Whenever a company requires finance it can…

Q: "the basic rationale for the objective of shareholder wealth maximization is that it that it…

A: Business has some objectives and responsibilities towards the stakeholders, mainly investors because…

Q: What are some considerations a company should take into account when establishing dividend policy?

A: there are some considerations a company should take into account when establishing a dividend policy…

Q: What does shareholder’s equity includes? Explain them.

A: Shareholder’s equity: The claims of owner's on a company’s resources after the liabilities are paid…

Q: Based on your understanding, differentiate the return earned between common shareholder and…

A: Common Shareholders are the ultimate owner's of a company. The return earned by them will be equal…

Q: xplain any three (3) differences between maximising profits and maximising shareholders’ wealth.…

A: A wealth of a shareholder maximizes when the net worth of a company maximizes, which is viewed as a…

Q: What is liquidity (corporation)?

A: Ability of a firm to raise the cash whenever there is need is known as liquidity of the company.…

Q: What are the risks in the corporation Equinix?

A: The ERM (Enterprise Risk Management) programme at an Equinix corporation is actually designed to…

Q: What other techniques can be applied to compute the intrinsic value of shares of the company?

A: Intrinsic value is the value inherent in the stock of a company based on how well it is expected to…

Q: What is the difference between the two basic sources of shareholders’ equity?

A: Shareholder's equity is the capital contributed by shareholders in the company and accumulated…

Q: What is return on shareholder's equity?

A: The return on shareholders' equity can be determined by using the following formula: ROE = Earnings…

Q: What are the direct and indirect costs of an IPO?

A: An initial public offering or IPO is the method of issuing the shares of the company to public for…

Q: How does attracting equity capital easier for a corporation?

A: Equity Capital Financing: It is a process of raising finances or capital by selling shares. When…

Q: Explain how dividend policy may affect shareholders wealth with particular attention to the tax…

A: Dividend per share and dividend yield are used to measure dividend policy. Dividend policy has…