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The objective of wealth maximization takes into account
- a)Amount of returns expected
- b)Timing of anticipated returns
- c)Risk associated with uncertainty of returns
- d)All of the above
Correct answer is option 'D'. Can you explain this answer?
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The objective of wealth maximization takes into accounta)Amount of ret...
Wealth maximization is a modern approach to financial management. Maximization of profit used to be the main aim of a business and financial management till the concept of wealth maximization came into being. It is a superior goal compared to profit maximization as it takes broader arena into consideration.
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The objective of wealth maximization takes into accounta)Amount of ret...
Objective of Wealth Maximization
The main objective of wealth maximization is to increase the shareholder's wealth by maximizing the value of their investment. This objective takes into account various factors such as returns, timing, and risk associated with uncertainty of returns.
Amount of Returns Expected
Wealth maximization considers the amount of returns expected from an investment. The amount of returns expected from an investment is an essential factor that helps in determining the value of the investment. The higher the expected returns, the more valuable the investment is considered to be.
Timing of Anticipated Returns
Another important factor considered in wealth maximization is the timing of anticipated returns. The timing of returns plays a crucial role in determining the value of an investment. An investment that generates returns earlier is considered more valuable than one that generates returns later.
Risk Associated with Uncertainty of Returns
Wealth maximization also takes into account the risk associated with uncertainty of returns. Investments that are considered risky are usually accompanied by higher returns. However, the level of risk associated with an investment must be carefully considered before making an investment decision.
All of the Above
In conclusion, wealth maximization considers all the above factors in determining the value of an investment. It is essential to consider all these factors to maximize the shareholder's wealth.
The main objective of wealth maximization is to increase the shareholder's wealth by maximizing the value of their investment. This objective takes into account various factors such as returns, timing, and risk associated with uncertainty of returns.
Amount of Returns Expected
Wealth maximization considers the amount of returns expected from an investment. The amount of returns expected from an investment is an essential factor that helps in determining the value of the investment. The higher the expected returns, the more valuable the investment is considered to be.
Timing of Anticipated Returns
Another important factor considered in wealth maximization is the timing of anticipated returns. The timing of returns plays a crucial role in determining the value of an investment. An investment that generates returns earlier is considered more valuable than one that generates returns later.
Risk Associated with Uncertainty of Returns
Wealth maximization also takes into account the risk associated with uncertainty of returns. Investments that are considered risky are usually accompanied by higher returns. However, the level of risk associated with an investment must be carefully considered before making an investment decision.
All of the Above
In conclusion, wealth maximization considers all the above factors in determining the value of an investment. It is essential to consider all these factors to maximize the shareholder's wealth.
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The objective of wealth maximization takes into accounta)Amount of returns expectedb)Timing of anticipated returnsc)Risk associated with uncertainty of returnsd)All of the aboveCorrect answer is option 'D'. Can you explain this answer?
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