The primary goal of the financial manager is to:

• A. Increase the company's market share
• B. Minimize the company's tax liability
• C. Maximize the value of the firm for its shareholders
• D. Ensure all debts are paid as soon as possible

Answer: (C)

Verified step by step guidance

1. Understand the role of a financial manager: The financial manager is responsible for making decisions that align with the company's financial goals and objectives, ensuring the firm's financial health and sustainability.
2. Clarify the primary goal: The primary goal of the financial manager is to maximize the value of the firm for its shareholders. This involves increasing shareholder wealth by making decisions that enhance the firm's profitability and long-term growth.
3. Evaluate other options: While increasing market share, minimizing tax liability, and ensuring debts are paid are important, they are secondary objectives. These actions contribute to the firm's overall value but are not the primary focus.
4. Connect shareholder value to firm performance: Shareholder value is directly tied to the firm's performance, including its stock price, profitability, and ability to generate returns. The financial manager must prioritize strategies that improve these metrics.
5. Summarize the goal: The financial manager's decisions should aim to maximize the firm's value for its shareholders, as this is the overarching objective that encompasses other financial considerations.