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Topic: Business
Number of pages / Number of words: 4 / 877
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They can also view their position as a chance to improve their personal status: having a company car or a nice furnished office.

One can argue that the main goal of management is to maximize the value of the firm. But that doesn't necessarily mean that shareholder value is going to be maximized. Wealth of stockholders could be a function of the value of their stock and the dividends the firm pays for that stock...


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But that doesn't necessarily mean that shareholder value is going to be maximized. Wealth of stockholders could be a function of the value of their stock and the dividends the firm pays for that stock. If management aims at maximizing firm value, it is very likely that they will set a low dividend payout ratio in order to reinvest the most part of their earnings...


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