Question

a) What is the objective of the firm in Finance? (6/7 Sentence)

b) Recently Broadcom wanted to acquire Qualcomm. The management and directors of Qualcomm rejected the offer. Is this consistent with managerial objectives for the financial firm? (6/7 Sentence)

Answer 1

The Main objective of firm in Finance. they are-

1. Profit Maximization objective-

Profit is the main objective of the business whether these business are related to finance, accounting or any other etc. Every business wants to maximise his profit by which firm can fulfill all the dreams of the employees.

Maximisation of profit gives the confidence to all the firms member by which members have to do extra efforts for earning more and more profits.

2. Wealth Maximisation Objective-

The second main motive and objective of the business is to do wealth maximise. Wealth Maximisation means maximising the Net Present value of course of action. Net present value means difference between net present value of benefits and present value of its cost.

By the above if Net present value are in positive then the business gives profit or vice-versa.

3. Value Maximisation Objective-

The goal of the mostly firms is to maximise the present wealth of the owner i.e. equity share holders. A company which stocks are traded in the market of which wealth of equity shareholders are called the Market value of equity shares.

The First goel and objective of the company is to maximise tthe wealth of shareholder i.e Market value of the equity shares.

4. Growth Maximisation Objective-

Every owner of the business wants to see her business at the topest level of the world by which every firm wants to achieve his growth maximisation objective by hook and crook.

5. Other Maximisation Objective like sales Maximisation and many other-

Main objective of the business to achieve all the benefits of which every business wants to achieve like sale Maximisation.

Recently Broadcom wanted to acquire Qualcomm. The management and directors of Qualcomm rejected the offer. Is this consistent with managerial objectives for the financial firm they are-

Qualcomm rejected $103 billion cash and stock bid from Broadcom. The qualcomm does not accept the offer of Brandcom becasue the firm want to run for a long term and the directors and shareholders of the Qualcomm is take decision for running their business for a long run.

Qualcomm Comes to know that even knowing the bid that is very difficult for the Qualcomm to come for taking the bid beacuse it is the lowest bid and wants the highest bid.

So,

Recently Broadcom wanted to acquire Qualcomm. The management and directors of Qualcomm rejected the offer as its not a better deal for the Qualcomm.