Can a firm maximize its profit if it is only managed to meet shareholders' interests? (Own words please)
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- What do you see as some of the possible problems if shareholder value is seen as a strategy (and not an outcome)?Is it realistic to believe that an optimal capital structure exists or might be achieved by a company?what does it mean to say that managers should maximize shareholders wealth subject to ethical constraints?
- Does profit maximization always lead to shareholder’s maximization?ASAP What is more important for a firm–profit maximization or value maximization? What issues orconflict of interest can come up between owners and managers and how can they be solved?Can a company be profitable but not liquid? Explain.
- What does it mean to say that managers should maximize shareholder wealth "subject to ethical constraints"? What ethical considerations might enter into decisions that result in cash flow and stock price effects that are less than they might otherwise have been?Why is it that the goal of financial management is maximization of shareholders’ wealth rather than maximization of profit?What does it mean to say that managers should maximize shareholders' wealth "subject to ethical constraints"? What ethical considerations might factor into decisions that result in lower cash flow and stock price effects than they might have otherwise been valued?
- What is a firm’s fundamental value (which is also called it intrinsic value)? What might cause a firm’s intrinsic value to be different from its actual market value?What could possibly go wrong while using financial leverage? Do you think it should be utilized by a company at all?If markets are truly efficient, does it matter whether firms engage in earnings management? On the other hand, if firms manage earnings, what does that say about management’s view on efficient markets?