The proper goal of the financial manager should be to maximise the firm's expected profit, because this will add the most wealth to each of the individual shareholders (owners) of the firm.

Question

Quizplus · Accepted Answer

The proper goal of the financial manager should be to maximise the firm's value, not just its expected profit. Maximising firm value will take into account all aspects of the firm's operations, including risk and long-term sustainability, which will ultimately benefit the shareholders in the long run. Maximising only expected profit may not be the best approach for long-term success.

The Proper Goal of the Financial Manager Should Be to Maximise