Company Shareholders: Profit Making and Market Share Essay

Company Shareholders: Profit Making and Market Share Essay

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a)
Shareholders are the people who own share of stock in a company. Shareholders are the owners of the company, since each share stock entitles owner to say in how the corporation is run. Shareholders elect a board of directors to make the company’s major decision, such as the number of shares to be issued to the public.
Shareholders wealth maximization is maximization of shareholders purchasing power. It is attempt made by a shareholder to accumulate as much wealth as possible, by whatever means possible. Wealth maximization is a long term objective, although is some instances a short term effort may be carried out to provide shareholders with wealth.
Shareholder wealth is the collective wealth right on shareholders through their investment in a company. Members of the board have involved duty to the shareholders and a responsibility to protect their investment by running the company sensibly and in line with generally accepted practice.
Each shareholder holds a small portion of the company. Issuing more shares will reduce shareholders wealth, while providing dividends to existing shareholders will increase it. Investors who purchase stock may take a long position with the goal of profits at a future date, or they may intend to capitalize on their wealth by selling the stock of another party and making money on the transaction.
Companies can determine shareholder wealth by looking at overall company value in term of the current value per share and number of stocks issued. Sometimes board members make strategic decision that will temporarily reduce shareholder wealth, such as investing in new facilities or technologies. These investments will add value later, and are acceptable to shareholders because they demonstrate a des...


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...e, 2006)
(Wright, 2009)
Bibliography
Bainbridge, S. (2006, february 7). The Importance of the Shareholder Wealth Maximization Standard. Retrieved march 21, 2014, from http://www.ideasinactiontv.com/tcs_daily/2006/02/the-importance-of-the-shareholder-wealth-maximization-standard.html
Peavler, R. (2010). What is Shareholder Wealth Maximization and Should Firms Pursue it? Retrieved march 22, 2014, from http://bizfinance.about.com/od/Basic-Financial-Management/a/what-is-shareholder-wealth-maximization.htm
Serlin, R. H. (2013, August 04). Is maximal profit at any cost really what shareholders want? Retrieved march 22, 2014, from http://richardhserlin.blogspot.com/2013/08/is-maximal-profit-at-any-cost-really.html
Wright, T. C. (2009). What Are a Shareholder's Objectives? Retrieved march 22, 2014, from http://yourbusiness.azcentral.com/shareholders-objectives-17287.html




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