The goal of financial management focuses on the fact that
A)the company will grow in size.
B)employee salaries should increase over time.
C)the current stockholders are the owners of the corporation.
D)the firm should expand faster than its competitors.
E)the current corporate officers should be highly compensated.

Question

Quizplus · Accepted Answer

The goal of financial management is to maximize the wealth of the current stockholders, who are the owners of the corporation. This is achieved by making decisions that increase the value of the stock and provide a higher return on investment for shareholders. Growing in size or expanding faster than competitors may be strategies to achieve this goal, but they are not the primary focus. Employee salaries and compensation for corporate officers may be considered in financial management decisions, but only in relation to their impact on shareholder value.

The Goal of Financial Management Focuses on the Fact That