Question

What is the Shareholder Wealth Maximization (SWM) ?

Answer 1

Shareholder Wealth Maximization (SWM) is the goal set by the company to maximize the wealth of that company, which in turn increase the shareholders wealth.

There might be many Shareholders in the company like individuals, Business or mutual Funds or even employees all of whom want their wealth to grow, this would happen only when the share price of the company increases

So when the management sets up the goal which helps to increase present value of the shareholders that would make the share price to gain which is good for all including company , shareholders, employees and also would positively effect economy of the country.

So it is much Needed for the management of any company to implement Shareholder wealth maximization plan .