RE: Shareholder Wealth Maximization as a Goal of Financial Management
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Great thoughts. However, I have some exceptions.
Now, to maximize shareholder wealth, the firm should take only those decisions that have the effect of increasing the long-term market price of the firm.
Do we only focus on the long term? We also must understand that the current wave of tech revolution makes changes to happen so fast. Thus, focusing "only" on a long-term may sometimes result in an obsolete investment.
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Generally speaking, we shouldn't only focus on the long-term when investing but on the short-term returns as well. However, it is important to be "long-termers" especially in investments like cryptocurrency. There are projects that you can't get the best returns if you focus on the short-term.
Coming back to the subject of shareholder wealth maximization, recall this..
A successful maximization of present value should result in an increase of the future value. This is why firms focus on decisions that can ensure an increased long-term market price of the firm.
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I think small but fast achieving goal is the best because then you can change a thing with what time needs