Question : Questions : Business Finance and Its Meaning
Statement 1: Financial planning aims to enhance shareholder wealth and company value.
Statement 2: Financial planning disregards the interests of stakeholders.
Option 1: Statement 1 is true, and statement 2 is false.
Option 2: Statement 1 is false, and statement 2 is true.
Option 3: Both statements 1 and 2 are true.
Option 4: Both statements 1 and 2 are false.
Correct Answer:
Statement 1 is true, and statement 2 is false.
Solution : The correct answer is (a) Statement 1 is true, and statement 2 is false.
Statement 1 is true. Financial planning aims to enhance shareholder wealth and company value. It involves making strategic financial decisions that contribute to the overall growth and prosperity of the company, which ultimately benefits shareholders.
Statement 2 is false. Financial planning does not disregard the interests of stakeholders. In fact, financial planning considers the interests of various stakeholders, including shareholders, employees, creditors, and the community at large. Effective financial planning takes into account the impact of financial decisions on all stakeholders and strives to create a balance that benefits all parties involved.
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