CHECKPOINT FINAL - market price shares. To put it another...

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Running head: WEEK 1 CHECKPOINT 1 WEEK 1 CHECKPOINT Sandy Edwards FIN/200 JANUARY 13, 2012 JAMES BOXMA
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WEEK 1 CHECKPOINT 2 WEEK 1 CHECKPOINT When looking into financial management they know that this includes the management of funds however, it also includes investment decisions, financing decisions, and dividend decisions of the organization. Thinking about these there is two primary goals of a financial manager. 1) Profit maximization 2) Wealth maximization We know that profit maximization was a way of making an efficient economic decision, by using profits as an economic concept and defining profit maximization as a criterion for economic efficiency. One of the focuses of financial management is the value to will come to the owners or suppliers of the equity capital. However the wealth of the owners is reflected in the market value of the shares. Therefore, wealth maximization does imply the maximization of the
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Unformatted text preview: market price shares. To put it another way would be that the maximization of the market price shares is the operational substitute for value/wealth/net present value maximization as a decision. Profit maximization also implies that a firm is keener to maximize its profits from business. However, this concept may not be good from the point of view of long term success of the organization. Wealth maximization, however, is the ultimate goal of a financial management. This is also known as Value Maximization or Net present worth maximization. These consider both the quantity and quality dimensions of benefits. However at the same time it will also incorporate the time value of money. WEEK 1 CHECKPOINT 3...
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This note was uploaded on 03/08/2012 for the course FIN 200 taught by Professor Williams during the Spring '08 term at University of Phoenix.

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CHECKPOINT FINAL - market price shares. To put it another...

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