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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 |
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There is no answer at this time. |
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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. |
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