The following are the major objectives of Financial Management:
a.
Profit Maximization and Growth of organization
b.
Profit Maximization and Wealth Maximization
c.
Wealth Maximization and Growth of organization
d.
Profit Maximization, Wealth Maximization and Growth of organizatio
Answers
Answer:
b . profit and wealth maximization...
Explanation....
The objectives of financial management are given below:
1. Profit maximization....
Main aim of any kind of economic activity is earning profit. A business concern is also functioning mainly for the purpose of earning profit. Profit is the measuring techniques to understand the business efficiency of the concern.
The finance manager tries to earn maximum profits for the company in the short-term and the long-term. He cannot guarantee profits in the long term because of business uncertainties. However, a company can earn maximum profits even in the long-term, if:
The Finance manager takes proper financial decisions
He uses the finance of the company properly
2. Wealth maximization....
Wealth maximization (shareholders’ value maximization) is also a main objective of financial management. 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. Better the performance, higher is the market value of shares and vice-versa. So, the finance manager must try to maximize shareholder’s value..