Question
The goal in corporate finance (financial management) is to maximize the shareholder wealth, or put simply, maximize the share price. Some argue that the pursuit
The goal in corporate finance (financial management) is to maximize the shareholder wealth, or put simply, maximize the share price. Some argue that the pursuit of this goal might result in unfair or even unethical conduct. To demonstrate this point, in this forum we will discuss the following scenario: Durham Hardware Store (DHS) was selling snow shovels for $10 each. The morning after a heavy snowstorm, the store raised the price to $20. Was this fair or ethical? Another scenario: To combat income-gap and wealth inequality, this year Soft Company (SC) raised their employee pay by 50%. This increased their operating costs and in turn the price they charged for their products, making the company less competitive. Was SC's action in the best interest of all the stakeholders? Discuss.
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