Multiple choice

The basic objective of Financial Management is:

  1. Maximization of profits.

  2. Profit Planning of the organization.

  3. Maximization of shareholders' wealth.

  4. Ensuring financial discipline in the organization.
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C Correct answer
Explanation

Financial management's primary objective is maximizing shareholders' wealth, not just profit maximization. Wealth maximization considers the time value of money, risk, and long-term value creation, whereas profit maximization is a short-term goal that may ignore risk factors.

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