The goal of finance is to create value for shareholders from "summary" of How Finance Works by Mihir Desai
Finance is all about creating value for shareholders. This is the fundamental goal that drives all financial decisions within a company. When we talk about creating value for shareholders, we are referring to increasing the wealth of the owners of the company - the shareholders. Shareholders are the individuals who have invested their money into the company by purchasing its stock. By doing so, they become part owners of the business. As owners, shareholders expect a return on their investment in the form of dividends and capital appreciation. This return is what drives the decisions made by companies from a financial perspective. In order to create value for shareholders, companies must make sound financial decisions that ultimately l...
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