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Homework answers / question archive / The goal of a corporation is best described as:   Maximizing gross profit   Maximizing profit   Maximizing directors’ salaries   Maximizing equity stockholder wealth

The goal of a corporation is best described as:   Maximizing gross profit   Maximizing profit   Maximizing directors’ salaries   Maximizing equity stockholder wealth

Finance

The goal of a corporation is best described as:

 

Maximizing gross profit

 

Maximizing profit

 

Maximizing directors’ salaries

 

Maximizing equity stockholder wealth

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Maximizing equity shareholder wealth.

In todays real world situation, wealth maximisation is better objective. If the company follows the goal of wealth maximisation, it means the firm considers all future cash flows,dividends,earning per share, risk of a decision etc.. Whereas profit maximisation does not consider the effect of EPS, dividend paid and any other returns to shareholders

Therefore goal of a corporation should be maximising equity shareholder wealth