The primary goal of finance in corporate organizations is the maximization of shareholders’ wealth.

The primary goal of finance in corporate organizations is the maximization of shareholders’ wealth. Using the balance sheet model of the firm, demonstrate how this goal can be achieved.

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The primary goal of finance in corporate organisation is the management of the shareholders wealth because finance in an organisation will always be inclined to the overall maximization of the shareholders wealth because shareholders wealth means the maximization in the value of the company in the long run and it is a much wider concept then the profit maximization because profit maximization is only inclined towards maximization of the profit in the short run, and it has nothing to do with the long-term prospective the company.

So there should always be a focus at wealth maximization or the value maximization which is also termed that shareholders maximization which is a long-term philosophical concept which is aimed at maximization of the total value of the shareholders which will be beneficial in the long run of the company and it is much wider concept than a profit maximization.

Balance sheet model of the firm illustrates that the Assets of the company would be equal to the liabilities of the company along with the shareholders equity so there should always be e a focus towards each three element and it is always needed for maximization of the value of the shareholders in the long run because shareholders are also an important part of overall balance sheet model so the share holders equity can only be maximized if the overall balance sheet is expanded and the assets are maximized.

jeff jeffy answered 1 year ago

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