Q.1 explain what financial management is and what decision are made in financial management

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Expert Solution

Financial management is a vital activity of an organization which involves planning, organizing, directing and controlling the financial activities of the firm, which in turn is guided to achieve the goal of shareholders wealth maximization. There are three decisions that financial managers have to take Investment Decision,Financing Decision, and Dividend Decision.

Investment decision:- It involves taking Decision on how much and where the fund should be invested.

Financing Decision:- It involves taking decision about how fund should be raised through different modes of financing.

Dividend Decision:- It involves taking decision regarding how much Dividend to be paid out of earnings and how much should be retained for further investment.

jeff jeffy answered 2 years ago

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