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Business, 21.01.2020 18:31 genyjoannerubiera

Firms must provide the right incentives if they are to get 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) 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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