The primary goal of financial management is a) maximizing shareholder wealth.
Financial management focuses on the effective allocation of resources within a firm to achieve the best possible outcomes for its stakeholders. Maximizing shareholder wealth means increasing the value of the company’s shares while ensuring that the interests of shareholders are prioritized. This approach is often measured by the company’s stock price and long-term profitability. While minimizing risk, increasing earnings, and maximizing cash flow are important components of financial strategy, they ultimately serve the broader goal of enhancing shareholder value.