Introduction
jibe to corporate finance theorists, the objective of the mansion should be to exploit range or wealth. This means for billetholders to maximise stock prices. By focusing on maximising stockholder wealth, the flying exposes itself to the danger that managers, who are hired to operate the firm for stockholders, may father their own objectives. This can lead to conflicts between both parties. Stockholders hence have the power to discipline and replace managers who do not attempt to maximise their wealth. For managers there are several techniques to nurse themselves from these actions (Osano, 2001).
In separate words: stock price maximisation is the most important goal of
most corporations. Stockholders own the firm and elect the board of directors, who then appoint the management team. way is supposed to operate in the best interests of the stockholders. However, as the stock of most large firms is widely held, the managers of large corporations have a great deal of autonomy. This means that managers might pursue goals other than stock price maximisation. Therefore managers run the risk of creation removed from their jobs, either by the firms board of directors or by outside forces.
A hostile putsch is a serve up that occurs when management does not want the firm to be taken over. This is most likely to occur when a firms stock is undervalued relational to its potential because of poor management. In a hostile coup, the managers of the acquired firm are generally fired, and any who are able to bear on, lose the autonomy they had prior to the acquisition.
A hostile takeover is generally conducted by cornering a certain companys stock on the market or via takeover process to publicly purchase shares in an industry on the market. An presidency whose market valuation is lower than its net asset value is more prone to become the victim of hostile takeover bids (Subramanian, 2003). This is because the...If you want to get a full essay, order it on our website: Ordercustompaper.com
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