BUISENESS MANAGEMENT
FINANCIAL MANAGEMENT
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
the number and types of products or services provided by the firm.
|
|
|
the minimization of the amount of taxes paid by the firm.
|
|
|
the creation of value for shareholders.
|
|
|
the dollars profits earned by the firm.
|
Detailed explanation-1: -The focal point of financial management in a firm is: the number and types of products or services provided by the firm.
Detailed explanation-2: -Wealth maximization (shareholders’ value maximization) is also a main objective of financial management. Wealth maximization means to earn maximum wealth for the shareholders. So, the finance manager tries to give maximum dividend to the shareholders. He also tries to increase the market value of the shares.
Detailed explanation-3: -a term used to describe a firm’s concentration on a single or limited range of business activities.
Detailed explanation-4: -"Shareholder wealth” in a firm is represented by: the number of people employed in the firm. the book value of the firm’s assets less the book value of its liabilities. the amount of salary paid to its employees. the market price per share of the firm’s common stock.
Detailed explanation-5: -In company form of business, the wealth created is reflected in the market value of its shares. Therefore, the financial decisions will cause to create wealth and it is indicated or reflected in market price of company’s shares. Hence the prime objective of financial management is to maximize the value of the firm.