Answer the following theory questions. i. Explain TWO (2) objectives of Financial Management. ii. State FOUR (4) factors that influence financ

here are the answers to the theory questions:

c) Answer the following theory questions:

i. Explain TWO (2) objectives of Financial Management.

• Wealth Maximization: The primary objective of financial management is to maximize the wealth of the shareholders. This is achieved by increasing the market value of the company's shares, considering both risk and the time value of money.
• Profit Maximization: This objective aims to maximize the firm's profits. While important for business survival, it is often considered a short-term goal and does not account for risk or the timing of returns.

ii. State FOUR (4) factors that influence financing decisions.

• Cost of Financing: The interest rate or dividend yield associated with different sources of funds.
• Risk: The level of financial risk introduced by debt (fixed payments) versus equity (no fixed payments).
• Control: The impact of new financing on the ownership and control structure of the company.
• Flexibility: The ability to raise additional funds in the future and adapt to changing financial needs.