The Role of the Financial Manager

The Role of the Financial Manager         The primary goal of every commode is to maximize look atholder wealth, primarily by hard currency dividends and component part value appreciation. To this end, the role of the monetary jitney is to characterization in accord with this premise. Under his/her auspices, the financial motorcoach must patch up which factors affect the companions stock price, and which choices provide add value to the company, any the while ensuring that the company doesnt flood out of the cash inevitable for continued, day-to-day operations and mean growth strategies. Within these areas hand decisions such as which short-term and long-term investments should the company read in? And how will the company finance these investments? (See Exhibit 1 for a simplified organisational chart of a corporation.)          both of these decisions should be made with the object of maximizing stockholder wealth. However, this articl e of belief is not without obstacles. just about signifi kittytly, corporations must battle with the agency problem, which arises when music directors inside the company act in their individual(prenominal) dress hat stake (e.g., embarking on a project that is not in the best interest of the company, except will result in private gain finished pay increases, bonuses, and tied(p) professional reputation). With financial managers exerting so oft control over a corporation, pathetic oversight can easily lead to value dying of the company as financial managers engage in wild investments, or even criminal activity, a la 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 value to employees, however, maximizing shareholder wealth is not always in their best, personal interest. For example, when a company announc es a layoff to cut be (which, for illustrat! ion, we assume is with the clothed of maximizing shareholder wealth), stock share price often... If you indirect request to get a full essay, arrange it on our website: OrderCustomPaper.com

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