Successful decision making in finance requires a deep understanding of the company’s objectives. Managers often apply to a variety of strategies that can ensure successful performance and problem solving within an organization. The most common objective of the firm is to increase the value of the firm’s stock and contribute to the wealth of the owners. In order words, the firm managers work for enhancing shareholder wealth, which is introduced by the market price of a company’s common stock. In the majority of cases wealth maximization of shareholders and owners is a long-term objective and it states that “…management should seek to maximize the present value of the expected future returns to the owners of the firm” (Moyer et al. 2008, p. 5). Certainly, firms must also consider other important objectives of an organization, including organizational culture improvement, analysis of retention policies, total quality management, change management, and many other fields. More importantly, managers should also be interested in the welfare of the community in particular and society in general due to the ongoing process of globalization. Despite possible shortcomings of the established priorities, shareholder or owner wealth maximization should be at the core of management objectives. At the same time, attention should be given to constraints and ethical concerns of increasing stock price and, therefore, managers should find optimal balance while accomplishing the primary goal of financial management. Advantages and Disadvantages of Pursuing the Objective of Shareholder Wealth Maximization Putting the shareholder wealth maximization at the core of the company’ values and goals creates a number of benefits. To begin with, the goal explicitly analyzes timing and possible risks of the expected benefits produced by stock ownership. Managers must also consider the components of timing and risk management while making significant financial decisions, including capital expenditures (Moyer et al. 2008). In such a manner, firms can solve problems that can improve shareholder wealth. Further, it is possible to define whether a certain financial decision correlates with the company’s objective. In case a decision contributes to the augmentation of the market price of the company’s stock, than it can also provide substantial benefits to the welfare of the company’s owners and shareholders. However, in case the action does not meet the established purposes, it should not be implemented. Because increase in shareholder wealth is an impersonal goal, it can also be considered as a considerable advantage for the firm. Shareholders and owners who disagree with the firm’s policies are eligible to sell their stocks under more beneficial terms as composed to the opportunities under the company’s strategy. In case an investor has risk preference that is not adjusted by financing, or does not conform to the firm’s decisions, the investor can sell his/her shares at higher price and buy shares in the companies that are able to meet the investor’s requirements (Moyer et al. 2008). Hence, the company should introduce effective strategies and policies that would attract investors and would make them encourage company’s goals at the same time. With regard to the above objectives, shareholders wealth maximization can be justified as the primary goal in