The primary objective of financial management is to maximize the wealth of shareholders. This means that the management of a company should take decisions that increase the value of the company's shares in the long run. Shareholder wealth maximization is considered to be the ultimate goal of any business because it represents the financial well-being of the owners of the company.

Examples:
1. Investment Decisions: When a company makes investment decisions, such as acquiring new assets or expanding into new markets, the primary consideration should be whether these decisions will increase the company's overall value and, therefore, maximize shareholder wealth. For example, if a company invests in research and development to develop new and innovative products that generate higher profits, it can lead to an increase in the company's share price and, consequently, the wealth of shareholders.

2. Financing Decisions: Financial management also involves making decisions about how to finance the company's operations. For instance, if a company decides to issue new shares to raise capital, it should carefully consider the impact of this decision on the value of existing shares. If the issuance of new shares dilutes the ownership of existing shareholders and reduces the value of their shares, it may not be in the best interest of maximizing shareholder wealth.

3. Dividend Decisions: Another aspect of financial management is determining the dividend policy of the company. The management should evaluate whether distributing dividends to shareholders will increase the overall wealth of the shareholders. This decision should take into account the company's profitability, cash flow, and future investment opportunities.

Measuring Shareholder's Wealth:
Shareholder wealth can be measured through various financial performance indicators, such as:

1. Market Capitalization: Market capitalization is the total value of a company's outstanding shares. It represents the market's perception of the company's value and is a reflection of shareholder wealth. An increase in market capitalization indicates an increase in shareholder wealth.

2. Total Shareholder Return (TSR): TSR is a measure of the total return received by shareholders, considering both capital appreciation (increase in share price) and dividends received. It provides a comprehensive measure of shareholder wealth over a specific period.

3. Earnings per Share (EPS): EPS is the portion of a company's profit allocated to each outstanding share. An increase in EPS signifies an increase in shareholder wealth, as it indicates that the company is generating more profit per share.

4. Return on Equity (ROE): ROE measures the profitability of a company relative to the shareholders' equity. A higher ROE indicates that the company is generating higher profits with the shareholders' investment, thus increasing shareholder wealth.

In conclusion, the primary objective of financial management is to maximize shareholder wealth. This objective is achieved through making investment decisions that increase the value of the company, financing decisions that preserve and enhance shareholder value, and dividend decisions that consider the overall impact on shareholder wealth. Shareholder wealth can be measured through indicators such as market capitalization, total shareholder return, earnings per share, and return on equity.