Profit Maximisation Is Not the Same as Shareholder Wealth Maximisation

question 15

Multiple Choice

Profit maximisation is not the same as shareholder wealth maximisation. Select the two things that a profit comparison does not take into account?

• A) Communication.
• B) Risk.
• C) Management expertise.
• D) Future prospects.

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Definitions:

Loss

A financial term representing the amount by which expenses exceed revenues.

Acceptance

The agreement to the terms of an offer, contract, or document, thereby creating a legally binding obligation.

Income

The total amount of money received by a person or company during a certain period, usually from work, investments, or business activities.

Loss

A financial condition where total expenses exceed total revenues, resulting in a negative profit.