Which one of the following is the most pervasive and sustaining objectives of financial decision making?

This question was previously asked in
UGC Paper 2: Commerce_17th Oct 2020 Shift 2
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  1. Profit maximization
  2. Earnings maximization
  3. Value maximization
  4. Cost minimization

Answer (Detailed Solution Below)

Option 3 : Value maximization
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UGC NET Paper 1: Held on 21st August 2024 Shift 1
50 Qs. 100 Marks 60 Mins

Detailed Solution

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Financial Management means planning, organizing, directing, and controlling the financial activities such as procurement and utilization of funds of the enterprise. It means applying general management principles to the financial resources of the enterprise.

Value maximization is the most pervasive and sustaining objectives of financial decision making.

  1. Value maximisation is the administrative activity concerned with determining an organization's long-term market value.
  2. All of an organization's financial assets, including equity, debt, preference shares, and warrants, make up its overall value.
  3. When a company's stock price rises on the market, its overall value rises as well.

Thus, option 3 is the correct answer.

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