The Role of the Financial Manager

The Role of the Financial Manager         The primary goal of any commode is to maximize look atholder wealth, primarily by dint of currency dividends and component part value appreciation. To this end, the role of the monetary conductor is to piece in accord with this premise. Under his/her auspices, the financial director must patch up which factors affect the caller-outs stock price, and which choices willing add value to the company, any the while ensuring that the company doesnt channelize out of the cash inevitable for continued, day-to-day operations and plan growth strategies. Within these areas hand decisions such as which short 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 end of maximizing stockholder wealth. However, this article of belie f is not without obstacles. around signifi raisetly, 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, precisely will result in private gain done pay increases, bonuses, and evening 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 Enro n, for personal gains.        Â!  Theoretically, when the financial manager acts in accord with maximizing shareowner 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 announces a layoff to cut be (which, for illustration, we assume is with the wrapped of maximizing shareholder wealth), stock share price often... If you pauperization to get a full essay, arrange it on our website: OrderCustomPaper.com

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