 Wealth maximization is aiming to maximize shareholder wealth by increasing the share price,

which increases market capitalization. The expectation of every shareholder or investor in a

company would be to generate a good amount of return from their investment and safeguard
their invested amount. It also helps keep the shareholders happy about their investments made
in the business. Typical examples of wealth maximization can be the cases where the
shareholders have benefited from investing in a particular stock over some time. Because the
company’s net worth has grown, this has positively impacted the share values, too and thus
increasing shareholders’ wealth.
 Profit maximization helps the company survive against all the odds of the business and requires
some short-term perspective to achieve the same. For example, when they have excess
inventory, it could maximize its short-term profits by lowering prices syempre hindi naman
pwede na sa mahabang panahon it will stay in lower prices. On the other hand, kaya naman
long-term ang wealth maximization because an organization must maximize its wealth in order
to survive and grow. Hence, it is important to make intelligent decisions with regard to the
maximization of shareholder wealth, to help it flourish in the long run. It is a long-term goal and
involves multiple external factors like sales, products, services, market share, etc.
 Since long-term nga yung wealth maximization, it assumes the risk. Meanwhile, profit
maximization ignores the risk and avoids the time value of money. It primarily concerns the
company’s survival and growth in the existing competitive business environment. Though the
company can ignore the risk factor in the short term, it cannot do the same in the long term as
shareholders have invested their money in the company with expectations of getting high
returns on their investment.
 As I’ve mentioned earlier, since typical examples of wealth maximization can be the cases where
the shareholders have benefited from investing in a particular stock over some time. Because
the company’s net worth has grown, this has positively impacted the share values, too and thus
increasing shareholders’ wealth. On the other hand, profit maximization primarily concerns the
company’s survival and growth in the existing competitive business environment.