1. Goal of the firm

Evaluate the following statement - Managers should not focus on the current stock value because doing so will lead to an overemphasis on short-term profits at the expense of long-term profits.

2. Agency Problems

Suppose you own stock in a company. The current price per share is RM25. Another company has just announced that it wants to buy your company and will pay RM35 per share to acquire all the outstanding stock. Your company's management immediately begins fighting off this hostile bid. Is management acting in the shareholders' best interests? Why or why not?