1.
The primary objective of financial management is:
A
Profit maximisation
B
Sales maximisation
C
Wealth maximisation of shareholders
D
Cost minimisation
View Answer
Correct Answer: C — Wealth maximisation of shareholders
Explanation:
The correct answer is C: Wealth maximisation of shareholders.
The primary objective of financial management is to maximise shareholders' wealth, reflected in the market value of shares. Profit maximisation is a narrower goal that ignores time value of money, risk, and the quality of earnings. Wealth maximisation is a broader, more comprehensive objective that accounts for these factors.