Question

Statement I: The objective of financial management is to maximize shareholders’ wealth.
Statement II: The shareholders gain if the value of shares in the market increases.
Choose the correct option:

• A. Statement I is true and Statement II is false.
• B. Statement II is true and Statement I is false.
• C. Both the Statements are true.
• D. Both the Statements are false.

Hint:

Financial management focuses on maximizing the market value of shareholders' wealth.

Answer 1

The Correct Option is C

Statement I accurately articulates the objective of financial management. Statement II is also valid, given that an increase in share value is advantageous to shareholders. Both statements are factually correct and interconnected.
Final Answer: (C) Both the Statements are true.