企业可能有不同的目标来实现。然而从理论上讲，一个公司应该设定它的目标来增加它的所有者的价值。股东是公司的所有者。因此，根据理论，股东财富最大化是企业的根本目标。
投资者通常期望在投资上获得满意的回报，因为他们需要尽可能地增加投资的价值。这通常是由股息派息或资本收益，通过增加市场价值的股价。该公司的管理者代表投资者的行为，如日常经营活动，并在企业内作出决定。在另一方面他们确实拥有对业务实体的控制权。然而，企业可能有其他目标，如实现利润最大化，增长和增加其市场份额。当实现这些目标的公司，冲突可能产生的所有权和控制的结果。管理者可以根据自己的利益做出决定，而不是实现投资者的财富。
讨论投资者相关的目标，如前所述，在管理理论的行为应该是一致的对股东财富最大化，提高企业的价值（基本和布里格姆-管理财务精要）。企业的价值是以股份公司的价格来衡量的。必须考虑股票价格的最大化及其对投资者和经济整体的影响。
Introduction 简介
Firms may have different objectives to achieve. However in theory, a firm should set its' objectives to increase its value for its owners. Shareholders are the owners of a firm. Therefore according to theory maximising shareholders wealth is the fundamental objective of a firm. (Watson & Head -Corporate Finance principles and practice 2007)
Investors generally expect to earn satisfactory returns on their investments as they require increasing the value of their investments as much as possible. This is usually determined by dividend payout and or capital gains by increasing the market value of the share price. The managers of the company act on behalf of the investors, such as operating day to day activities and making decisions within the business. In another way they do have the control of the business entity. However, firms may have other objectives to achieve such as maximising of profits, growth and increasing its' markets share. When achieving these objectives of a firm, conflicts may arise as a result of ownership and control. Managers may make their decisions on their own interests rather than achieving investors' wealth.
Discussing the investor related goals as described earlier, in theory behaviour of management should be consistent towards maximising shareholders wealth, enhancing the value of the business (Basely & Brigham- Essentials of Managerial Finance).Value of the business is measured by valuing firms' price of shares. It's essential to consider maximising of stock prices, and its' impact to the investors and the economy as a whole simultaneously.
Maximising profits is also an objective of a firm. It is determined by maximising the firm's net profits. It is also can be described as a short term objective whilst maximising the value of the company is a long term objective for a firm (Financial Management -Kaplan Publishers 2009). Therefore it is not necessary, maximising profits as maximising shareholders wealth because there are number of potential problems can be occurred adapting to an objective of profit maximisation. It will be discussed in the latter part of the report.
Earnings per share (EPS) is one of the main indicators of the firms' profitability and it is a broadly used method measuring firm's success, as it is determined return to equity in theory(Financial Management - Kaplan Publishers 2009).However, EPS doesn't expose the firm's wealth since it is determined by using firms' net profits. Therefore EPS is also exist the same criticism as profit maximisation above which will be discussing in the later part of the report.
During the past ten years have seen a much greater emphasis on investor related goals. The conflict of ownership and control can be recognised as one of the significant causes which were affected investors and the world economy in the past ten years. The corporate scandals such as Enron, Maxwell and World com which occurred recent past had been lost investors confidence towards capital markets. Therefore it's essential to consider the ethical behaviour and social responsibilities towards shareholder wealth maximisation simultaneously. It can also be said the institutional investors such as insurance companies and pension funds had also made a significant influence on investor related goals in the recent past.
Review of Literature 文献综述
OBJECTIVE OF PROFIT MAXIMISATION
According to Watson and Head 2007, whilst individuals manage their own cash flows, the financial manager involves in managing cash flows on behalf of the company, and its owners. In a firm financial management is
