Ch 1 · Scope & Objectives of Financial Management

5 concept points · 0 formulas · 4 exam-critical points.

📘 Core concepts

• 1Functions: Investment (capital budgeting), Financing (capital structure), Dividend (payout policy), Working Capital.
• 2Profit maximisation vs Wealth maximisation — wealth (NPV) is the goal.
• 3Time value of money is foundational concept.
• 4Agency relationship — costs to align managers with shareholders.
• 5Financial decisions interact: investment & financing affect each other (M&M, Modigliani-Miller).