ACFI205 Lecture 1: Introduction to Financial Management & Financial Planning 2022/2023

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Roles managers play - ANS-- strategic management: develop objectives and formulate strategy to achieve objectives - operation management: day to day control over various business functions - risk ... management: identify and properly manage risks faced by a business finance functions - ANS-- financial planning: evaluate viability of proposed course through making projected financial statements - investment project appraisal: assessing profitability and riskiness of projects - financing decisions: identify and assess diff sources of finance - capital market operation: related to issues concerning pricing of loan or valuation of share price - financial control: monitoring plans put into action primary objective of firm - ANS-value maximisation/ shareholder's wealth maximisation wealth can come in two forms - ANS-through dividend and price appreciation is profit maximisation same as value maximisation? - ANS-no. The primary objective of a business is shareholder wealth maximization within a market economy shareholders provide funds to a business in the expectation that they will receive the maximum possible increase in wealth for the level of risk that must be face the term wealth . in this context is referred to the market value of the ordinary share the market value will intern reflect the future returns the shareholders will expect to receive overtime... [Show More]

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