Question

What are the objectives of financial management?

Options

• maximising the shareholders' wealth

• proper utilisation of funds

• maintenance of liquidity

• All of the above

Answer 1

All of the above

Explanation -

The primary goal of financial management is to maximise shareholder value, wealth. That is, the primary goal of financial planning. A company's management should choose those financial actions that are profitable in the long run the stockholders' point of view The company's stockholders profits as the market value of their stock rises. Shares are rising. The value of shares rises on the market. when the benefits of a financial action outweigh the costs the expense of obtaining them To put it another way, A financial decision increases the share's market value if it results in a gain in value. As a result, financial decisions should be made in such a way that some value is added and the price of the equity share rises. When a financial decision achieves the core goal of wealth maximisation, other goals such as proper fund utilisation, liquidity management, and so on are automatically met.