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Assumption in several economics textbooks

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Reference no: EM131068109

Read the discussion question and post an answer of at least one paragraph with a minimum of 200 words. 

Question: 

Profit maximization is a very popular assumption in several economics textbooks and is presented as the ultimate goal of a for profit firm. In finance, however, you will see, time after time, that the ultimate goal of the manager is to maximize the stock price.

One may think that they imply the same so that if a company is a profit maximizer, this company's stock price will automatically be maximized. Alternatively, one might believe that one is superior to the other.

Please discuss if   "profit maximization" implies "stock price maximization" and they may be used interchangeably or they are quite different concepts and one is superior to the other.  You may use your textbook, as well as other web sources to build your point.

Reference no: EM131068109

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