BMF – MAY 2015 – L1 – SA – Q11 – Nature of Business, Types, and Objectives.

Identifying an alternative to shareholders' wealth maximisation.

Question

Which of the following is regarded as an alternative to shareholders’ wealth maximisation?

A. Long term stability
B. Long term growth
C. Corporate wealth maximisation
D. Share price maximisation
E. Cost minimisation

Answer

Answer: C. Corporate wealth maximisation

Explanation:
Corporate wealth maximisation is considered an alternative to shareholders’ wealth maximisation. While shareholders’ wealth focuses on the interests of shareholders, corporate wealth considers the interests of a wider group of stakeholders, including employees, customers, and society.

Tags: Business Objectives, Corporate wealth, Shareholders' Wealth, Wealth Maximization
Level: Level 1

Topic: Nature of Business, Types, and Objectives
Series: MAY 2015

Uploader: Kwame Aikins