FIN 200 CheckPoint financial management goals

FIN 200 CheckPoint financial management goals - Q> Write...

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Write a 200- to 300-word paper describing the goals of financial management. The description should include how earnings are valued, how shareholder wealth can be maximized, and how management decisions affect stockholder wealth. Answer:- Financial Management or business finance is concerned with managing an entity’s money. For example, a company must decide: where to invest its money. whether or not to replace an old asset. when to issue new stocks and bonds. whether or not to pay dividends. Goals of Financial Management Valuation Approach These are measurements of the total "value" of a publicly-traded corporation. Investors need a way to judge how much a company's stock is worth. To evaluate this, analysts have come up with various earnings valuation models. Earnings are net profits, i.e. what's left over after expenses. Investors often want to know the earnings per share (EPS). They also want to calculate the price/earnings (P/E) ratio, i.e. the stock price divided by the earnings. This is the most common earnings valuation model. Maximizing shareholder wealth (shareholder wealth maximization)
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This note was uploaded on 12/30/2009 for the course QWE 65 taught by Professor Qasd during the Spring '09 term at University of Phoenix.

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FIN 200 CheckPoint financial management goals - Q> Write...

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