Managers should concentrate on maximising shareholder value alone only if three conditions are met. These conditions...

Managers should concentrate on maximising shareholder value alone only if three conditions are met. These conditions require: (a) complete markets, (b) no significant asymmetric information, and (c) known re-contracting costs.

Discuss how a violation of any of these conditions necessitates a much larger view of management’s role in firm decision making.

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Rahul Sunny answered 2 years ago

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Managers should concentrate on maximising shareholder value alone only if three conditions are met. These conditions...

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