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How can managers target owners' wealth when different owners (shareholders) have different amounts of wealth and...

How can managers target owners' wealth when different owners (shareholders) have different amounts of wealth and may follow different investment strategies?

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Answer #1

Ultimate goal of any business is maximizing the value of firm. if value of firm increases then its share price will increase. A corporation has So many number of shares that is hold by number of shareholder in different proportion. Some holder may hold ten shares and some might hold 1,000,000 shares of company.

if value of firm increases then share price of each shares also increase then value of wealth of shareholder also increase in proportion of their holdings in company. Shareholders also invest in company for different purpose like capital in long term, regular dividend.

if company earn good profit and have good performance then it will pay regular dividend as well as increase share price of company and shareholder get return in term of capital gain.

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