State with brief reasons whether the following statements are true or false: (i) Maximising Market Price Per Share (MPS) as the financial objective…

Statement True or False Reason Maximising Market Price Per Share (MPS) as the financial objective which maximises the wealth of shareholders. True Maximizing MPS or Market value as the financial objective will ensure the maximizing shareholder's wealth. A combination of lower risk and higher return is known as risk-return trade off and at this level of risk-return, profit is maximum. False There is a direct relationship between risk and profit. Higher the risk, higher is the possibility of profits. Stockholders expect greater returns from investments of higher risk and vice-versa. Financial distress is a position when accounting profits of a firm are sufficient to meet its long-term obligations. False Financial distress is a position where Cash inflows of a firm are inadequate to meet all its current obligations. Angel investor is one who provides funds for start-up in exchange for an ownership/equity. True Angel Financing is a form of an equity-financing where an angel investor provides capital for start-up or expansion, in exchange for an ownership/equity in the company.