Asked by Megan kibby on Jul 20, 2024
Verified
Which one of the following actions by a financial manager is most aligned with the goal of financial management?
A) Increasing the size of a firm by acquiring a non-profitable competitor.
B) Increasing the sales of the firm by expanding the company's sales force.
C) Issuing additional shares of stock to repay all of the firm's long-term debt.
D) Improving the efficiency of the company such that the value of the stock increases.
E) Increasing the bonuses paid to the top executives as the size of the firm increases.
Financial Manager
A professional responsible for managing the financial health of a corporation, focusing on planning, directing investment activities, and developing strategies.
Acquisition
The process by which one company purchases most or all of another company's shares in order to take control.
- Recognize the implications of financial decisions on agency problems and the market value of the firm.
Verified Answer
AM
abdellah mabaoutJul 24, 2024
Final Answer :
D
Explanation :
The primary goal of financial management is to maximize shareholder wealth, which is directly aligned with increasing the value of the company's stock. Improving the efficiency of the company to increase stock value (D) directly contributes to this goal.
Learning Objectives
- Recognize the implications of financial decisions on agency problems and the market value of the firm.
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