Which one of the following best states the primary goal of financial management? Select one: a. Maximize current dividends per share b. Maximize the current value per share c. Increase cash flow and avoid financial distress d. Minimize operational costs while maximizing firm efficiency e. Maintain steady growth while increasing current profits

Question

Gage Barker

Business

6 October, 10:10

Which one of the following best states the primary goal of financial management? Select one: a. Maximize current dividends per share b. Maximize the current value per share c. Increase cash flow and avoid financial distress d. Minimize operational costs while maximizing firm efficiency e. Maintain steady growth while increasing current profits

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Answers (1)

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Dashawn Maynard · Answer 1

B

Explanation:

The main of financial management is maximization of shareholders' investment in the company. Whereas the metric for shareholder's investment is the current share price

To maximize share price the company must post positive earnings, grow its asset base as well as pay dividends from profits realized. Such company is then perceived worthy of investing in and many investors are happy buying its shares.

Judging from the law of demand, the higher the quantity demanded the higher price set.