Wealth Maximization Concepts Worksheet
Gary Jones
University of Phoenix
Wealth Maximization Concepts Worksheet
Concept Application of Concept in the Scenario Reference to Concept in Reading
Growth Opportunities/
Maximizing Shareholder Wealth
In this scenario there are four companies that desire to acquire global growth opportunities. How they are going to obtain their dreams is by acquisitioning each other. LEI want’s to further their endeavors with Shang-wa in order to increase global demand. Thus, increasing market share and maximizing shareholder wealth. However, they are being acquisitioned by Avral. “The firm’s performance depends on the value it creates for its shareholders. Shareholders are better off when the value of their shares is increased by the firm’s decisions.” ( Jaffe, Ross & Westerfield. 2004)
Balance Sheet
“The balance sheet is an accountant’s snapshot of the firm’s accounting value on a particular date as the firm stood momentarily still.”( Jaffe, Ross , & Westerfield.2005) In the scenario each company had to disclose their balance sheet to the company that is being acquisitioned; so the organization may no the financial standing of the company. “The balance sheet states what the firm owns and how it is financial.” (Jaffe, Ross, & Westerfield.2005) “The accounting definition that underlies the balance sheet and describe the balance is Assets= Liabilities+ Shareholder’s Equity.” (Jaffe, Ross, & Westerfield. 2004)
Income Statement
In the scenario, Bernard Lester requested financial informati ...