Question
Business Studies Question on Business Finance
Financial management aims at choosing the best investment and financing alternatives. Its objective is to:
A
Increase the shareholders’ wealth
B
Decrease the shareholders’ wealth
C
Increase the shareholders’ capital
D
Decrease the shareholders’ capital
Answer
Increase the shareholders’ wealth
Explanation
Solution
The primary objective of financial management is to increase shareholders’ wealth by making investment and financing decisions that maximize returns relative to the risks involved.