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: -Shareholder wealth maximization means that a company’s primary goal is raising its stock price. Shareholder wealth maximization can be a good thing because it gives a firm’s managers a clear objective that builds value.

Detailed explanation-3: -The primary objectives of financial management are – Profit Maximization and Wealth Maximization. Profit Maximization, as its name suggests, refers to the company’s profit should be increased, while Wealth Maximization aims to accelerate the entity’s value.

Detailed explanation-4: -The objective of wealth maximization takes into accounta)Amount of returns expectedb)Timing of anticipated returnsc)Risk associated with uncertainty of returnsd)All of the aboveCorrect answer is option ‘D’.

Detailed explanation-5: -The paramount objective of the financial management is maximising the shareholders’ wealth. That is, the basic objective of financial management for a company is to opt for those financial decisions that prove gainful from the point of view of the shareholders.