Financial managers should primarily strive to:
A)minimize costs while increasing current dividends.
B)maximize the current profits of the firm.
C)maximize the current value per share of existing stock.
D)maximize current dividends even if doing so adds financial distress costs to the firm.
E)maximize current market share in every market in which the firm participates.

Question

Quizplus · Accepted Answer

The primary goal of financial managers should be to maximize the current value per share of existing stock, which means maximizing shareholder wealth over the long-term. This takes into account the future earnings potential of the firm, rather than just focusing on short-term profits or dividends. While minimizing costs is important, it should not be done at the expense of long-term value creation. Similarly, maximizing current dividends may not always be the best strategy if it leads to financial distress costs that harm the overall health of the firm. Maximizing market share is also not necessarily the most important goal, as it may not always lead to profitability or sustainable growth.

Financial Managers Should Primarily Strive To