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We address the importance of maximizing shareholders’ wealth. However, it seems like maximizing stock prices does...

We address the importance of maximizing shareholders’ wealth. However, it seems like maximizing stock prices does not make sense, because investors focus on short-term results and do not care about long-term consequences. What do you think? Please discuss.

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Maximizing shareholder prices is the main objective of the management. Investors do not only focus on short term results. Many of them are long term players and are looking for capital gains as well. Maximizing share prices increases the value of the firm. This is beenficial to both the organization and the shareholders. They are able to trade the stocks and make gains. Also the credibility of the firm increases which is benefical to the business.

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