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1. 1. The process through which the company is capable of increasing earning capacity known as Profit Maximization. On the other hand, the ability of the company in increasing the value of its stock in the market is known as wealth maximization.
2. 2. Profit maximization is a short term objective of the firm while the long-term objective is Wealth Maximization.
3. 3. Profit Maximization ignores risk and uncertainty. Unlike Wealth Maximization, which considers both?
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4. 4. Profit Maximization avoids time value of money, but Wealth Maximization recognizes it.
5. Profit Maximization is necessary for the survival and growth of the enterprise. Conversely, Wealth Maximization accelerates the growth rate of the enterprise and aims at attaining the maximum market share of the economy.
