Financial Management · Class 12 · CBSE · Commerce Business Studies
Which objective of financial management is considered superior because it considers both the return and the risk associated with business decisions?
Practice question from Financial Management (Class 12 · CBSE · Commerce Business Studies), with the correct answer and a step-by-step solution.
medium · MCQ · Q-79FECA
Which objective of financial management is considered superior because it considers both the return and the risk associated with business decisions?
- A.Maximisation of sales
- B.Profit maximisation
- C.Wealth maximisationCorrect answer
- D.Maximisation of production
Solution
Wealth maximisation aims at increasing the market value of shareholders’ investment. It considers the timing and risk of expected returns, unlike profit maximisation, which may ignore these factors.
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