andmanagers of firm. As, managers are the agents appointed by owners, astrategicinvestor or theowner of the firm would be majorly concerned aboutthe longer term performance of thebusinessthat can lead to maximization of shareholder‘s wealth. Whereas, a manager might focus ontakingsuchdecisions that can bring quick result, so that he/she can get credit for good performance.However, in course of fulfilling the same, a manager might optfor risky decisions which can puton stake the owner‘s objectives.Hence, amanager should align his/her objective to broadobjective of organization andachieve atradeoff between risk and return while making decision;keeping inmind the ultimate goal of financial management i.e. to maximize the wealthof itscurrent shareholdershe objections are:-(i) Profit cannot be ascertainedwell in advance to expressthe probability of return as future isuncertain. It isnot at possible to maximize what cannot beknown.(ii) The executive or thedecision maker may not have enough confidence in the estimatesof futurereturns so that he does not attempt future to maximize. It is argued thatfirm's goalcannotbe to maximize profits but to attain a certain level or rate of profit holding certain share of themarket or certain level of sales. Firmsshould try to 'satisfy' rather than to 'maximize'(iii) There must be a balance between expected return and risk. The possibility of higher expectedyields are associated with greater risk to recognise such a balance and wealthMaximization isbrought in to the analysis. In such cases,higher capitalisation rate involves. Suchcombination of expected returnswith risk variations and related capitalisation rate cannot beconsidered intheconcept of profit maximization.(iv) The goal of Maximization of profitsisconsidered to be a narrow outlook. Evidentlywhen profit maximization becomes the basis of financial decisions of the concern, it ignorestheinterests of the community on the one hand andthat of the government,workers andother concerned persons in the enterprise on theother hand.Keeping the above objections in view, most of the thinkers on thesubject have come totheconclusion that the aim of an enterprise should bewealth Maximization and not the profitMaximization. Prof. Soloman of Stanford University has handled the issued very logically.Heargues that it isuseful to make a distinction between profit and 'profitability'.Maximizationof profits with a vie to maximising the wealth of shareholdersis clearly an unreal motive. Ontheother hand, profitability Maximizationwith a view to using resources to yield economicvalueshigher than the jointvalues of inputs required is a useful goal. Thus the proper goalof financialmanagement is wealth maximization.