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How is shareholder's wealth maximisation...

How is shareholder's wealth maximisation linked with the market price of the shares of the company ?

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The main and foremost objective of financial management is to maximise the wealth of equity shareholders. The financial manager of a company taeks this decision because the shareholders are the owners of the company .
Financial decision taken will dtermine the manner in which of the funds are invested.
The return on investment will determine the value and prive of the shares. The market priece of the shares will increase if the benefit from th decision has exceeded its cost.
Secondly, the odjective of increase in value of equity shares automatically fulfils many other objectives like , increasing the profitability , maintaining liquidity , effective utlisation of funds and providing for growth of the company.
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ARIHANT PUBLICATION-Financial Management -CHAPTER PRACTICE (Short Answer type questions)
  1. State the objective of financial management .

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  2. Discuss in brief the importance of financial management .

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  3. What is meant by 'long-term investment decision ? State any three fact...

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  4. Inestment decision can vbe long-term or short-term. Explain long-term ...

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  5. Explain any four points that highlight the importance of financial pla...

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  6. Financial planning tries to link the present with the future. Explain ...

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  7. what do you understand by the term 'trading on equity. ?

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  8. Though Angel Pharma is making huge profits every year on a regular bva...

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  9. When can a capital sturucture be considered optimum and what kind of ...

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  10. What is fixed capital ? Enumerate any two of the factors determining t...

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  11. What is meant by working capital ?

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  12. What does 'management of fixed capital,imply ? Explain briefly any thr...

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  13. You are a financial expert and your company startys a busineess of man...

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  14. The overall financial health of a business is determined by the qualit...

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  15. How is shareholder's wealth maximisation linked with the market price ...

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  16. Why does a financial manager consider wealth maximisation as the forem...

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  17. Investment criteraia is one of the factors, which affect capital budge...

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  18. State whether the working capital requirement of business manufacturi...

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  19. Distinguish between fixed capital and working capital .

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  20. The Return on Investment (RoI) of a company ranges between 10-12% for ...

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