MANAGEMENT

Detailed explanation-1: -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-2: -Accordingly, the basic objective of financial management are: Ensuring a regular and suitable supply of funds for the organisation. To ensure optimum use of funds. Once the funds are procured, they should be used in the maximum possible way at minimum cost. Creation of a stable capital structure.

Detailed explanation-3: -Wealth maximisation or net present value maximisation provides an appropriate and operationally feasible decision criterion for financial management decisions.

Detailed explanation-4: -A company sources its capital funds from multiple sources. It takes loans from banks and raises capital from the market. Capital from different sources has different costs. Financial management ensures a healthy balance between different sources of capital in the company’s capital structure.