Business
Business, 18.01.2020 03:31, hhomeschool24

Firms must provide the right incentives if they are to get to focus on long-run value maximization. conflicts exist between managers and stockholders and between stockholders (represented by managers) and . managers' personal goals may compete with shareholder wealth maximization. however, managers can be motivated to act in their stockholders' best interests through (1) reasonable packages, (2) firing managers, and (3) the threat of hostile takeovers. if a firm's stock is undervalued, corporate raiders will see it as a bargain and will attempt to capture the firm in a hostile takeover.

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Firms must provide the right incentives if they are to get to focus on long-run value maximization....

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