The goal of the firm

So far we have seen that financial managers are primarily concerned with investment decisions and financing decisions with in business organization. The great majority of these decisions are made with in the corporate business structure. Hence, most of our discussion in this book focuses in the financial decision making in corporations. One such issue concerns the objective of financial decision-making. What goal or (goals) do managers have in mind when they choose between financial alternatives? Whenever a decision is to be made, management should choose the alternative that most increase the wealth of the owners of the business. These decision relating to corporation are continuous. To apply these decisions, the corporation should have to set of goals. There are two broad goals for the corporation. They are two widely discussed schools of thought about the objectives of the firm.