Suppliers of Loan Capital

The suppliers of Loan Capital such as trade Creditors, debenture holders, Commercial banks and financial institutions. They are entitled to a fixed rate of interest for using their funds, The firm has legal obligation to them first before the residual cairning's are sharwed among the owners, if the company to pay, they can call the company to liquidation.

Hence a Compilay which pursues the policy of wealth maximisation ensures l he futori: of the suppliers of capital. The company should ensure liquidity position to service all of its loan capital.

Value of Vitro

EMPLOYEES

The objective of workers is to maximise their welfare, which is a monetary burden to the firm. The company can fulfil it only when it attains the Corporate objective of wealth Maximisation.

A corporation which maximises its wealth will automatically share it with workers and extend the helping hand to them. Who in turn extend their cooperation for the development of the company through higher productivity and efficiency.

SOCIETY

The social benefits such as employment, higher standard of living, will become possible only when society's resources are better utilised. Hence optimal capital formation will ensure growth of the economy. The resources should be directed where their marginal productivity is greatest.

Capital market should direct savings to those companies which are expected to undertake investment projects that promise higher returns which in turn eyeates wealth to the society. Thus wealth maximisation reflects the most efficient use of the society's economic resources and leads to the maximisation of society's economic wealth.

MANAGEMENT

Management has to integrate interest, of all parties concerned such as employees, shareholders, creditors, owners, bankers, etc. Their benefits will be assured and maximised only when the company's wealth is maximised. Their share is assured only when the company's survival is assured.

It is the responsibility of the management to cater some profits for the research and development to assure survival. Management should keep long run in view and frame its policies to ensure survival and growth of the firm. Thus management interest and share holders interest of wealth maximisation should be in harmony.

LIQUIDITY vs PROFITABILITY | MAXIMISATION OF RETURN | WEALTH MAXIMISATION | Constraints - Policy Decisions - Profitability | IMPLICATIONS OF WEALTH MAXIMISATION | Suppliers of Loan Capital | RELEVANCE OF WEALTH MAXIMISATION | Retaining earning and Undistributed profits | Managerial finance function | Functions of Financial Management | FINANCIAL FORECASTING | MANAGEMENT OF CORPORATION ASSET STRUCTURE | THE MANAGEMENT OF INCOME | MANAGEMENT OF CASH | DECIDING OUT NEW SOURCES OF FINANCE | CONTACT AND CARRY NEGOTIATIONS FOR NEW FINANCING | ANALYSIS AND APPRAISAL OF FINANCIAL PERFORMANCE | INCIDENTAL OR ROUTINE FUNCTIONS | CAPITAL BUDGETING DECISION | CURRENT ASSET MANAGEMENT | Maximisation of Share Value | RESPONSIBILITIES OF FINANCIAL MANAGEMENT IN THE FIRM | Functions of the Treasurer and Controller | TASKS OF FINANCIAL MANAGEMENT | CHALLENGES OF FINANCIAL MANAGEMENT | Gross and Net Savings | Household Savings | How to politely win when credit disputes and problems arise