since it is a long run investment, the ability of the firm to involve in effective planning affect the wealth of the shareholders
C) What is the goal of the firm? Discuss how to measure achievement of this goal?
profit maximization &wealth maximization of shareholders.
the value of a firm determines their wealth.if the value of a firm,which is the market price per share of the total number of shares issued,is increased,invariably the shareholders' return is increased..by John I Agwu
___ measure how effectively a firm manages assets to generate revenue
Equity shareholders are investors that own the shares of the firm. As an investor you need to pay to get ownership of the shares. The shares are either bought from another investor, or from the firm, when the shares are issued.
The reatined earnings of a firm belongs to teh partners of the firm and in case of a company it belongs to the shareholders.
since it is a long run investment, the ability of the firm to involve in effective planning affect the wealth of the shareholders
to what extent does profitability of a firm measure its efficiency
Measure of Success of EconomyYes, the GNP is the measure of success of an economy.
C) What is the goal of the firm? Discuss how to measure achievement of this goal?
C) What is the goal of the firm? Discuss how to measure achievement of this goal?
profit maximization &wealth maximization of shareholders.
Its success is a measure of the habitat it occupies.
Current theory asserts that the firms' proper goal is to maximize shareholders' wealth, as measured by the market price of the firm's stock. A firm's stock price reflects the timing, size and risk of the cash flow that investors expect a firm to generate over time. So financial managers should undertake only those actions that they expect will increase the value of the firm's future cash flow. Theorical and empirical arguments support the assertion that managers should focus on maximization shareholder wealth. Shareholders of a firm are sometimes called residual claimants, meaning that they have claims only on any of the firm's cash flows that remain after employees, suppliers, creditors, governments and other stakeholders are paid in full. As you see, shareholders stand at the end of this line so if the firm cannot pay the stakeholders first, shareholders receive nothing! Shareholders also bear most of the risk of running the firm. So if firms did not manage to maximize shareholders wealth, investors would have little incentive to accept the risks necessary for a business to succeed.
Measure of Success of EconomyYes, the GNP is the measure of success of an economy.
the value of a firm determines their wealth.if the value of a firm,which is the market price per share of the total number of shares issued,is increased,invariably the shareholders' return is increased..by John I Agwu