Shareholders make to a large extent, the real owners of the business. Indeed, such persons as the managers and the presidents are just but the facilitators and as such are not allowed to claim any returns yielded by the company.
Maximization of wealth belonging to the shareholders therefore might imply that the shareholders initial price of the shares rise and upon liquidation of the company, they sell the shares at a higher price than they actually bought them. In addition, upon making profits, the company pays the shareholders’ dividends.
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