Using good discernment and supported by graphs, numerical examples and theoretical concepts, make a critical analysis supported
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Question:
Using good discernment and supported by graphs, numerical examples and theoretical concepts, make a critical analysis supported by financial theory of the following statements:
1. It is known that the goal of a manager is to maximize the value of the organization. However, this objective is sometimes confused with that of maximizing profits or profits. It is very common for certain corporations to increase profits and yet destroy value.
2. Theories of finance, as in economics, use assumptions that may not seem realistic. For example, markets are not 100% efficient at all times, but finance theory relies heavily on this assumption. In other words, we are not judging the realism of the theory's assumptions, but its predictive power.
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