The ultimate goal of all financial decisions is “to maximize the value of shareholders”. With your...

The ultimate goal of all financial decisions is “to maximize the value of shareholders”. With your knowledge in Strategic Finance Issues, how true is this statement and how can financial manager practically achieve the “shareholder value maximization goal” through the decisions they take? You may use the balance sheet model to explain.

Expert Solution

The ultimate aim of all the financial decision is to maximize the value of the shareholders because shareholders are the owners of the company and business is always trying to fulfill the expectation of the shareholders by maximizing their value and all the decisions are taken in perspective of the shareholders in order to help them to appreciate their overall capital.

This is a true statement as maximization of shareholder value has a importance but maximisation of value of Organisation has a higher importance because value maximization concept that has long term implications and it is a sustainable concept because organisation is trying to achieve long-term sustainability rather than short term profitability so value maximization is often a better management strategy because it is leading to higher profits for the company in the long run so value maximization is about all the stakeholders of the organisation where as share holders maximization is just concentrated at the share holders maximization and value maximization is basically about maximization of the stakeholders worth ratherthan shareholders worth

jeff jeffy answered 2 years ago

We learned that the ultimate goal of financial management is to maximize shareholders' wealth. Could this...

We learned that the ultimate goal of financial management is to maximize shareholders' wealth. Could this goal conflict with other goals, such as customer and employee safety, the environment and the general good of society? Should the firms take into consideration the well-being of the society in their effort to maximize shareholders' wealth? Try to think of some specific scenarios to illustrate your answer.

The goal of international financial management is to maximize shareholders' wealth, same as that of financial management.

The goal of international financial management is to maximize shareholders' wealth, same as that of financial management. Then what are the four factors/topics that make international finance separate or special?

Suppose you are a policy-maker your ultimate goal is to maximize the social welfare.

Suppose you are a policy-maker your ultimate goal is to maximize the social welfare. There is a hardware firm producing a product, say laptop. This firm produces one kind of laptop with respect to its technical specificătions but with different colours. Suppose the firm sets the same price,p. for a laptop regardless of its colour. • Does this firm overproduce or underproduce? Explain. • What kind of strategy would make the firm produce in a way to maximize the social welfare?

We have learnt that the financial manager's or the firm's goal should be to maximize shareholders'...

We have learnt that the financial manager's or the firm's goal should be to maximize shareholders' wealth by maximizing the value of the stock. However, does this goal conflict with other goals, such as avoiding unethical or illegal behavior? In particular, do you think subjects such as customer and employee safety, the environment, and the general good of society fit in this framework, or are they essentially ignored? For example, think about the environmental regulation violations by Volkswagen, and more...

It is often argued that the goal of financial management is to maximize the value of...

It is often argued that the goal of financial management is to maximize the value of the firm for its owners. Prompt: Do you agree that this is the proper goal? Why or why not? Read Goizueta (1997) (Links to an external site.). Here, Goizueta defends Coca-Cola’s stated mission: “to create value over time for the owners of our business.” Prompt: Do you find his arguments persuasive? Why or why not? minimum 300 words

1. It is often argued that the goal of financial management is to maximize the value...

1. It is often argued that the goal of financial management is to maximize the value of the firm for its owners. Do you agree that this is the proper goal? Why or why not? 2. Here, Goizueta defends Coca-Cola’s stated mission: "to create value over time for the owners of our business.”Do you find his arguments persuasive? Why or why not?

The goal of the firm is? Maximize Retained Earnings Minimize Risk Maximize Shareholders wealth Maximize Net...

The goal of the firm is? Maximize Retained Earnings Minimize Risk Maximize Shareholders wealth Maximize Net income

Your textbook states that the goal of financial management in a corporation is to maximize the...

Your textbook states that the goal of financial management in a corporation is to maximize the current stock price. Initially, this seems very short-sighted and could cause managers to violate ethical principles in pursuit of that goal. Is the textbook's definition of financial management flawed? How do we ensure that managers will act responsibly as stewards of the stockholder's resources?

The primary goal of financial management is to maximize the market value of the existing stock.

The primary goal of financial management is to maximize the market value of the existing stock. Select one: True False

"The goal of financial management is to take actions which maximize the value of a firm's...

"The goal of financial management is to take actions which maximize the value of a firm's stock. Those actions will eventually appear in the firm's financial statement, so a general understanding of financial statements is very important for the manager." Given the recent failure of many financial institutions, do you believe business leaders really understand and use all of the concepts and principles we teach in accounting, finance, and economics? In addition, do you believe financial managers are truly concerned...

Question