ASSIGNMENTS- MBA Sem-II MB0029 ± FINANCIAL MANAGEMENT
Mr. Mithesh Kumar Reg. No.
20930668 Page 3
maximization goal. It is possible only when it produces quality goods at lowcost. On this account society gains because of the societal welfare.
Maximization of wealth demands on the part of corporate to develop new products or render new service in the most effective manner.
his helps theconsumer as it will bring to the market the products and service thatconsumer¶s need.
Another notable feature of the firms committed to the maximization of wealthis that to achieve this goal they are forced to render efficient to their customerswith courtesy.
his enhance consumer welfare and hence the benefit to thesociety.
rom the point of evaluation of performance of listed firms,the most remarkable measure is that of performance of the company inthe share market. Every corporate finds its reflection on the market value of shares of the company.
herefore, shareholder wealth maximization could beconsidered a superior goal compared to a superior goal compared to profitmaximization.
Since listing ensures liquidity to the shares held by the investors, shareholder can reap the benefits arising from the performance of company only when theysell their shares.
herefore, it is clear that maximization of market value of share will lead to maximization of the net wealth of shareholders.
Your grandfather is 7
years old. He has total savings of Rs.80,000. Heexpects that he live for another 10 years and will like to spend his savings bythen. He places his savings into a bank account earning 10 per cent annually. Hewill draw equal amount each year- the first withdrawal occurring one year fromnow in such a way that his account balance becomes zero at the end of 10 years.How much will be his annual withdrawal?
Present Value (PV) = 80000/-Amount (A) = ?Interest Rate (I) = 10% No. of Year (N) = 10