Which of the following statements is not true regarding the goal of financial management?
The goal of maximizing the value per share of existing stock is relevant to all organizations.
A way of aligning management goals to shareholder’s interest is to tie managerial compensation to the market value of the firm’s stock.
For a company considering international operations, the goal will be the same but the company will have to consider the local social, economical and political environment in the decision-making process.
All of the above are true
The first choice...relevant to ALL organizations. Hmmmm, the financial manager at our Central Texas Girl Scouts does not have that as her goal, I am certain.
Second: True, that is one way. There are about a thousand other ways.
Third: Always true
So, false: I vote for the first as false, the word "all" being what sticks in my craw.
I thank you so much, because thi is really help.
The statement "All of the above are true" is not true regarding the goal of financial management.
To determine which statement is not true, we need to analyze each statement and identify any potential inconsistencies.
1. The goal of maximizing the value per share of existing stock is relevant to all organizations.
This statement is generally true. The goal of maximizing the value per share is a common objective in financial management, as it reflects the desire to increase the wealth of shareholders. Thus, this statement is likely true.
2. A way of aligning management goals to shareholder’s interest is to tie managerial compensation to the market value of the firm’s stock.
This statement is also true. Tying managerial compensation to the market value of the firm’s stock incentivizes managers to make decisions that increase shareholder value. Therefore, this statement is likely true.
3. For a company considering international operations, the goal will be the same but the company will have to consider the local social, economical, and political environment in the decision-making process.
This statement is also true. While the goal of financial management remains the same irrespective of geographical location, companies expanding internationally must consider various factors that may impact their decision-making process. These factors include social, economic, and political aspects specific to the local environment. Therefore, this statement is likely true.
Based on the analysis, all of the statements appear to be true. There is no indication that any of the statements are false. Therefore, the correct answer is "All of the above are true."