Statement I The objective of finance function is wealth maximisation. Statement II The objective of finance function is profit maximisation.

April 15, 2024 by rawan239

flow. Profit maximization is not the same as wealth maximization, because profit is only one measure of a company’s value. A company can have a high profit margin, but if it is not growing, its stock price may not increase. Conversely, a company can have a low profit margin, but if it is growing rapidly, its stock price may increase.

Here is a brief explanation of each option:

• A. Both statements are correct. This is incorrect, because Statement II is incorrect.
• B. Both statements are incorrect. This is incorrect, because Statement I is correct.
• C. Statement I is correct, Statement II is incorrect. This is the correct answer, as explained above.
• D. Statement I is incorrect, Statement II is correct. This is incorrect, because Statement I is correct.