BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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minimizing risk.
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maximizing profit.
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maximizing wealth.
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minimizing return.
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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: -The primary objective of the financial management process is to optimize the financial and economic benefits of an investment.
Detailed explanation-3: -Wealth maximization means to earn maximum wealth for the shareholders. So, the finance manager tries to give a maximum dividend to the shareholders. He also tries to increase the market value of the shares. The market value of the shares is directly related to the performance of the company.
Detailed explanation-4: -The correct answer is d) maximize shareholder wealth. The primary objective of the financial manager is to focus on adopting techniques, methods, and strategies that will enhance the value of the company’s stocks which in turn help to maximize the wealth of the company’s shareholders.