BUISENESS MANAGEMENT
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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maximize earnings per share.
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maximize the value of the firm’s common stock.
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maximize return on investment.
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maximize market share.
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Detailed explanation-1: -The long-run objective of financial management is to: maximize earnings per share.
Detailed explanation-2: -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.
Detailed explanation-3: -The shareholder value maximization model holds that the primary goal of the firm is to maximize its market value and implies that business decisions should seek to increase the net present value of the economic profits of the firm.
Detailed explanation-4: -Profit maximisation is the only objective of financial managemant. OR Maximisation of profit is real and complete motive.