In the context of finance, which of the following represents the long-run objective of financial management?

The long-run objective of financial management is to maximize the value of the firm's common stock. This goal reflects the focus on increasing shareholder wealth over time, which is a primary responsibility of financial managers. By enhancing stock value, financial management essentially aims to ensure that the firm's performance and strategic decisions lead to sustainable growth, higher profits, and better returns for investors, aligning the interests of management and shareholders.

In practice, maximizing stock value involves various considerations, such as managing risks, investing in profitable projects, improving operational efficiency, and maintaining strong financial health. Focusing on this long-term objective helps in establishing a solid foundation for the company, enabling it to thrive in competitive markets and adapt to changing economic conditions.

While maximizing short-term profits, maintaining operational efficiency, and reducing operational costs can be important tactical goals, they do not encompass the broader and more strategic framework necessary for long-term success and shareholder value.