Google Answers Logo
View Question
 
Q: Finance ( No Answer,   1 Comment )
Question  
Subject: Finance
Category: Business and Money > Finance
Asked by: baseball2-ga
List Price: $8.00
Posted: 19 Apr 2005 18:18 PDT
Expires: 20 Apr 2005 11:43 PDT
Question ID: 511603
Some big businesses are criticized for fcoucusing on short-term
perfromance at the expense of long-term expsense of long term results.
Why would a firm that strives to maximize stock prices be lesss
subject to an overmphasis on short-term results than one that
maximizes profits?

I could use an answer tonight if at all possible. Thank you
Answer  
There is no answer at this time.

Comments  
Subject: Re: Finance
From: jack_of_few_trades-ga on 20 Apr 2005 11:13 PDT
 
Certain high up executives are paid extra based on the year to year
profit of the company.  If simple profit in 1 year is their goal then
they will likely buy cheap machines and give less benefits to
employees (that is oversimplified, but definately the case) in order
to make their 1 year profits higher.

An executive who's goal is to raise the value of the stock in the long
run (perhaps with stock options) will be more likely to buy quality
machines that will last and will give good benefits to the employees
in order to retain the top notch workers.

Important Disclaimer: Answers and comments provided on Google Answers are general information, and are not intended to substitute for informed professional medical, psychiatric, psychological, tax, legal, investment, accounting, or other professional advice. Google does not endorse, and expressly disclaims liability for any product, manufacturer, distributor, service or service provider mentioned or any opinion expressed in answers or comments. Please read carefully the Google Answers Terms of Service.

If you feel that you have found inappropriate content, please let us know by emailing us at answers-support@google.com with the question ID listed above. Thank you.
Search Google Answers for
Google Answers  


Google Home - Answers FAQ - Terms of Service - Privacy Policy