The primary financial goal of the business firm is to maximize the wealth of the firm's...

The primary financial goal of the business firm is to maximize the wealth of the firm's owners. Wealth, in turn, refers to value. If a group of people owns a business firm, the contribution that firm makes to that group's wealth is determined by the market value of that firm.
Are you agree? yes or no ? why?

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I agree with the statement. The goal and of financial management is to maximize the value of the firm. This value is determined by the market value of the shares held by the owners who are the shareholders. A point of distinction here is between value and profits. Maximizing profits of the firm does not guarantee increase in the value since the management can take unethical decisions which will increase the profits but will result in long-term losses and loss of goodwill. This will have an impact on the value of the firm. Hence value is determined by the market value of the firm.

jeff jeffy answered 1 year ago

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