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Financial Management
What are the main objectives of financial management? Briefly explain.
Or
State the primary objective of financial management.
The objective of financial management is to maximise the wealth of the owners of the business to the maximum extent.
According to this approach, owners’ interest can be best served by wealth maximisation. Wealth maximisation means to increase the capital invested in the business by the shareholders. Market price of the shares is the index of the capital invested. If the market price of the shares increases, it can be said that capital (wealth) invested by the shareholders has been appreciating. On the contrary, fall in the market price of the shares has an adverse effect on their wealth. Wealth of the shareholders can be computed by the following formula:
Shareholder’s Current Wealth in a Company = Number of Shares x Market Price Per Share.
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‘Wealth Maximisation’ is an important objective of financial management. Explain briefly.
What are the main objectives of financial management? Briefly explain.
Or
State the primary objective of financial management.
How the wealth of shareholders can be computed?
What is meant by Financial Management?
Every manager has to take three major decisions while performing the finance function. Explain them.
Explain any six factors affecting the financing decision of a company.
Explain any six factors affecting the dividend decision of a company.
What is meant by Dividend decision? State any four factors affecting the Dividend decision.
What is meant by Financing decision? State any four factors affecting the financing decision.
Explain briefly the factors affecting the investment decision.
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