Prior to the financial crisis of 2008 most books on corporate finance defined the objective as:
Brealey & Myers: “Success is usually judged by value: Shareholders are made better off by any decision which increases the value of their stake in the firm… The secret of success in financial management is to increase value.”
Copeland & Weston: The most important theme is that the objective of the firm is to maximize the wealth of its stockholders.”
Brigham and Gapenski: “The management’s primary goal is stockholder wealth maximization which translates into maximizing the price of the common stock.
Van Horne: “In this book, we assume that the objective of the firm is to maximize its value to its stockholders.”
While maximising stockholder value remains one of the main objectives, books published after the crisis tend to present a somewhat softer approach.
What do you think has changed?
Also, you might want to reflect upon the Classical Objective Function
