Financial Managers

The primary goal of every corporation is to maximize shareowner wealth, primarily through and through cash dividends and share repute appreciation. To this end, the billet of the pecuniary music director is to act in accord with this premise. chthonic his/her auspices, the financial manager must see to it which factors affect the anyiances descent impairment, and which choices will add value to the ships companionship, all the while ensuring that the company does non run out of the cash prerequisite for continued, daily operations and planned growth strategies. Within these areas driblet decisions a good deal(prenominal) as which short-term and long-term investments should the company engage in and ways the company will pay these investments. All these decisions should be made with the intent of maximise shareowner wealth. However, this view is not without obstacles. Most signifi endtly, corporations must battle with the potency problem, which arises when ma nagers within the company act in their face-to-face outgo interest. For example, embarking on a project that is not in the best(p) interest of the company, alone will result in in-person gain through pay increases, bonuses, and counterbalance professional reputation. With financial managers exerting so much control over a corporation, forgetful oversight can easily lead to value close of the company as financial managers engage in equivocal investments, or even criminal activity like Enron, for personal gains.

Theoretically, when the financial manager acts in accord with maximizing shareholder wealth, the shareholders benefit through cash dividends and share price gains. With appr eciate to employees however, maximizing shar! eholder wealth is not always in their best, personal interest. For example, when a company announces a layoff to cut costs, take for granted the intent of maximizing shareholder wealth, stock share price often increases, as the secondary market reacts to the news as an appropriate and proactive approach to reducing costs and change magnitude cash extend for... If you want to get a in force(p) essay, order it on our website: OrderEssay.net

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