BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
to maximize the return
|
|
|
to minimize the risk
|
|
|
to maximize the wealth of owners
|
|
|
to maximize profit
|
Detailed explanation-1: -The goal of financial management is to maximize shareholder wealth. For public companies this is the stock price, and for private companies this is the market value of the owners’ equity. We’ll discuss the drawbacks of other potential measures.
Detailed explanation-2: -Answer and Explanation: The primary goal of financial management is to: B) maximize the current value per share of the existing stock . The most important goal is to maximize the value of existing stock, which in turn maximizes the per share value.
Detailed explanation-3: -The primary goal of the financial management is to maximize the wealth of owners. All businesses aim to maximize their profits, minimize their expenses and maximize their market share.
Detailed explanation-4: -The shareholder wealth maximization goal states that management should seek to maximize the present value of the expected future returns to the owners (that is, shareholders) of the firm. These returns can take the form of periodic dividend payments or proceeds from the sale of the common stock.
Detailed explanation-5: -Wealth maximization’s ultimate goal is to keep the stockholders invested in a business by increasing overall value.