Which one of the following best illustrates that the management of a firm is adhering to the goal of financial management?
A) An increase in the amount of the quarterly dividend
B) A decrease in the per unit production costs
C) An increase in the number of shares outstanding
D) A decrease in the net working capital
E) An increase in the market value per share

Question

Quizplus · Accepted Answer

An increase in the market value per share indicates that the management is focused on increasing shareholder wealth, which is one of the primary goals of financial management. A) An increase in the dividend may not necessarily indicate good financial management, as it could lead to cash flow issues. B) Decrease in production costs may indicate efficient operations but not necessarily good financial management. C) An increase in the number of shares outstanding would dilute the value of existing shares, and may not be in the interest of shareholders. D) Decrease in net working capital may indicate a liquidity issue, which is not a desirable goal for financial management.

Which One of the Following Best Illustrates That the Management