The proper goal of the financial manager should be to maximize the firm's expected profit, since this will add the most wealth to each of the individual shareholders (owners) of the firm.

Question

Quizplus · Accepted Answer

The proper goal of the financial manager should be to maximize the value of the firm, not just expected profit. Maximizing firm value considers both short-term and long-term profitability, as well as the risk and timing of cash flows, all of which impact shareholder wealth.

The Proper Goal of the Financial Manager Should Be to Maximize