The proper goal of the financial manager should be to maximize 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 maximize the value of the firm, not just expected profit, because this takes into account the timing and risk of the expected cash flows. Maximizing value adds the most long-term wealth to the shareholders.

The Proper Goal of the Financial Manager Should Be to Maximize