Question
The idea of maximizing market value is related to the idea of maximizing shareholder value, as market value is the price at which an asset
The idea of maximizing market value is related to the idea of maximizing shareholder value, as market value is the price at which an asset would trade in a competitive setting. The sole concentration on shareholder value has been criticized, for concern that a management decision can maximize shareholder value while lowering the welfare of other stakeholders (Block & Hirt, 2012).
In some cases, management bonuses are tied to metrics such as profit percentage or net income. Additionally, managers are required to act in the best interest of the shareholders. What are some possible issues or conflicts with these responsibilities? Support your response.
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