objections against profit maximisation ..............
Answers
Objectives of financial management
• Financial management is one of the functional areas of
business. Therefore, its objectives must be consistent with the
overall objectives of business. The overall objective of
financial management is to provide maximum return
to the owners on their investment in the long- term.
• This is known as wealth maximisation. Maximisation of owners’
wealth is possible when the capital invested initially increases
over a period of time. Wealth maximisation means maximising
the market value of investment in shares of the company.
• Wealth of shareholders = Number of shares held ×Market price
per share.
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Answer:
Though profit earning by a business is essential but profit maximisation is not desirable. Maximising profits without caring for anything else will amount to exploitation.
Explanation:
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