Wealth maximization is one of the approaches, which involves latest innovations and improvements in the field of the businesses. Maximization reduction financial is term means shareholder wealth or value of the persons those who are involved in the business concern. This objective is a universally accepted concept in the field. It removes technical disadvantages of the profit accumulation. The concept considers the comparison of the value to cost associated with the entity. Total value detected from the total cost incurred for the group. It provides extract value of the business. This criteria provides efficient allocation of resources and it also ensures the economic interest of the society. The goal of maximizing the value of the stock avoids the problems associated with the different goals we discussed above. It is a long term concept based on the cash flows rather than gain and hence there can be a situation where a one makes losses every year but there are cash because of heavy depreciation which indirectly suggests heavy investment in fixed assets and that is the real value and it takes into account the time value of money and so is universally accepted.
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CODIGO E DESCRICAO DA ATIVIDADE ECONOMICA PRINCIPAL Construcao de edificios
Maximization reduction financial requires maximum return and try to get a reduction in losses as much as possible.The professional in charge tries to earn maximum returns for the company though proper financial management. He cannot guarantee profits in the long run because of business uncertainties. However, a company can earn high profits even in the long-term, if: • it takes proper financial decisions. • And uses the finance of the company properly. Wealth accumulation is also a main objective of financial management. This means to earn maximum wealth for the owners So, management tries to give a higher dividend to the shareholders. He also tries to increase the value of the investment. The value is directly related to the performance of the company. Better the performance, higher is the market value of shares and vice-versa. Therefore one must try to maximize shareholder's value.