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Can a firm maximize the wealth of shareholders without compromising its stakeholders? Why or why not? Provide justifications.

Sagot :

Explanation:

Shareholders might wish to pursue objectives other than or in addition to wealth maximization, e.g., concern for the environment. This is a two-part criticism: (a) Managers are reluctant to pursue other objectives because those run afoul of wealth maximization; and (b) Pursuit of the other objectives is a means to increase shareholder wealth, but managers do not fully appreciate it