Volume : IX, Issue : II, February - 2019

PROFIT MAXIMISATION vs. WEALTH MAXIMISATION

Madhumitha Kesavan

Abstract :

The paper draws a distinction between profit maximisation and shareholder maximisation, and highlights which would be the better approach to be followed by companies for their smooth functioning. The scope of this paper is restricted to the finding of whether wealth maximisation is an efficient theory to be followed by a company for its growth rather than profit maximisation or if the vice–versa is to be applicable. It’s stated that directors, while exercising their duties, must exercise them in the best interest of the company, in good faith and should be loyal to the company at all times. There is an interest for the company to give good returns to shareholders who risk their assets to provide company capital. The paper shall be restricted to mainly 2 parts where the first part shall highlight and emphasise on wealth maximization and second part shall deal with profit maximization. The paper shall finally be concluded with suggestions and recommendations which directors may resort to, for resolving the conflict of between the shareholders and stakeholders

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Article: Download PDF   DOI : 10.36106/ijar  

Cite This Article:

PROFIT MAXIMISATION VS. WEALTH MAXIMISATION, Madhumitha Kesavan INDIAN JOURNAL OF APPLIED RESEARCH : Volume-9 | Issue-2 | February-2019

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