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Question 1) First define the goal of financial management, then discuss WHY this goal is more...

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Finance

Question 1) First define the goal of financial management, thendiscuss WHY this goal is more important than any other....

Question 2) Define the agency problem, and discuss how toresolve it from the perspective of a stockholder.

Please more than 400 words for each question and to be brieflydescribed.

Thanks

Answer & Explanation Solved by verified expert
3.7 Ratings (426 Votes)
1 Goal of financial management It is a popular saying that money is to an enterprise what oil is to an engine So management of money is very important to a business The ultimate goal of financial management is increasing the value of shares We can divide the goal of financial management into two i Profit Maximization and ii Wealth Maximization i Profit Maximization A business exist for a reason and that reason is profit So profit maximization is also an objective of financial management Finance manager has to take decisions to maximize profit That means each alternative therefore is to be seen as to whether or not it gives maximum profit But is profit maximization the sole objective of financial management If not why There are number of reasons    See Answer
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