Week 1,2 Role of financial management

After studying Chapter 1, you should be able to:

l Explain why the role of the financial manager today is so important.

l Describe “financial management” in terms of the three major decision areas that confront the financial manager.

l Identify the goal of the firm and understand why shareholders’ wealth maximization is preferred over other goals.

l Understand the potential problems arising when management of the corporation and ownership are separated (i.e., agency problems).

l Demonstrate an understanding of corporate governance.

l Discuss the issues underlying social responsibility of the firm.

l Understand the basic responsibilities of financial managers and the differences between a “treasurer” and a “controller.”

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