Why should financial managers strive to maximize the current value per share of the existing stock? doing so guarantees the company will grow in size at the maximum possible rate doing so increases employee salaries because this will increase the current dividends per share
Why should financial managers strive to maximize the current value per share of the existing stock? Doing so guarantees the company will grow in size at the maximum possible rate. Doing so increases employee salaries.
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AnswerWhy do financial managers emphasize the goal of maximizing the market price of stock?
Financial managers emphasize the goal of maximizing the market price of stock because they have a legal and ethical obligation to make decisions consistent with the financial interests of their firm's owners.
What do financial managers try to maximize and what is their second objective?
The primary objective of financial management is to maximize the profit of the organization. However, the organization also seeks to maximize the wealth and value by maximizing the returns to shareholders.
Which of the following should a good financial manager try to maximize?
Financial managers should strive to maximize the current value per share of the existing stock to: best represent the interests of the current shareholders.
What variable is the financial manager seeking to maximize?
The goal of a financial manager is to maximize the wealth of the shareholders (they implement this by maximizing the value of the company's assets).
Why the financial manager should maximize their wealth?
In summary, wealth maximization as an objective to financial management and other business decisions enables the shareholders to achieve their objectives and therefore is superior to profit maximization. It is a decision criterion for financial managers being used for all the decisions.Apr 25, 2022
How do financial managers maximize shareholder value?
Maximizing Shareholder and Market Value. A goal of financial management can be to maximize shareholder wealth by paying dividends and/or causing the market value to increase.
What is the importance of financial manager?
Financial managers generally oversee the financial health of an organization and help ensure its continued viability. They supervise important functions, such as monitoring cash flow, determining profitability, managing expenses and producing accurate financial information.
What is the importance of financial management?
Importance of Financial Management
Assists in acquiring and managing funds. Helps in funds allocation. Provides insights to make critical financial decisions. Cuts down financial costs.Nov 3, 2021
Assists in acquiring and managing funds. Helps in funds allocation. Provides insights to make critical financial decisions. Cuts down financial costs.Nov 3, 2021
How does the financial manager help in achieving the goal of the organization?
Financial managers are responsible for the financial health of an organization. They produce financial reports, direct investment activities, and develop strategies and plans for the long-term financial goals of their organization.
Why is financial management important essay?
Financial management systems help to proper use and allocation of funds which leads to improve the operational activity of the business organization. If the funds use properly, so it helps to reduce the cost of capital and maximizing the value of the firm.
Why should a shareholder wealth maximization be the overriding objective of management?
The shareholder wealth maximization goal states that management should seek to maximize the present value of the expected future returns to the owners (that is, shareholders) of the firm. These returns can take the form of periodic dividend payments or proceeds from the sale of the common stock.
Why is financial management important for students?
Finances are one of the main reasons that students drop out of college. By practicing proper money management techniques now, students can feel confident about their ability to manage finances into their adult life, save money and avoid debt down the road. College is also when a lot of people start to build credit.Nov 14, 2018