英文财务教材新管理.pptVIP

Profit Maximization Maximizing a firm’s earnings after taxes. Problems: Could increase current profits while harming firm (e.g., defer maintenance, issue common stock to buy T-bills, etc.). Ignores the invested capital which gain the earnings. Ignores changes in the risk level of the firm. Earnings per Share Maximization Does not specify timing or duration of expected returns. Ignores changes in the risk level of the firm. Calls for a zero payout dividend policy. Maximizing earnings after taxes divided by shares outstanding. Problems Strengths of Shareholder Wealth Maximization The pric