Who benefits from wealth maximization

1. Who benefits from wealth maximization Stakeholders: Owners: Shareholder wealth maximization is the dominant goal of the firm, in terms of economic profit (EVA), the reason behind that ethical standard because they are the agents of shareholders and self-interests of managers. Mangers: some believe that the dominant business goal is the management welfare maximization, because they are interested in their own welfare. In the perfect competition, managers maximize wealth just to survive. They have several conflict with the share holders, they are interested in size over profitability. The risk attitude, agency problem.

2. Creditors:in general the creditors’ protection increase when wealth increases. But some exceptions could be considered, especially with risk associated with the investment, so we have to consider the interest of both shareholders and creditors. Customers, employees, and suppliers: it is in the interest of owners to benefit other groups such as customers and employees, (best better products and compensation package, and good relations with suppliers in order to get high quality of inputs). Society: investment to improve efficiency means reducing the cost of the firm product and realize an increase in the wages of employees. in the