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Goals of Financial Management: Valuing Earnings and Maximizing Shareholder Wealth

Describe the goals of financial management. The description should include how earnings are valued, how shareholder wealth can be maximized, and how management decisions affect stockholder wealth.

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Financial Management Goals

Describe the goals of financial management. The description should include how earnings are valued, how shareholder wealth can be maximized, and how management decisions affect stockholder wealth.

Financial management is a systematic process that provides the necessary financial information to help a business produce and distribute goods and services in a way that will maximize wealth. (Pandey, I.M.) Financial management involves management of funds, raising of funds and allocation of profits. Hence financial management provides a systematic framework for achieving the goals. The two important goals of financial management can be profit maximization and wealth maximization. Out of this wealth ...

Solution Summary

This solution defines financial management, how earnings are valued, and the goals of financial management in 346 words.

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