1. In class, we address the importance of maximizing shareholders’ wealth. However, it seems like maximizing...

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1. In class, we address the importance of maximizingshareholders’ wealth. However, it seems like maximizing stockprices does not make sense, because investors focus on short-termresults and don’t care about long-term consequences. What do youthink? Please discuss. 2. Uber Inc. is planning to issue an IPOthis May. It is known as a ride-hailing business and just likeLyft. Both companies offer ride-sharing, carpooling, bike andscooter rentals for short trips on-demand. But Uber’s structure isway more complicated than its smaller rival: it also generatessignificant revenue from three other business such as Uber Eats andUber Freight. Also, it operates in 63 countries and nearly 700cities, compared to Lyft which only operates in the U.S. andCanada. Because of its complexity, regulators are more likely toscrutinize how Uber approaches segment reporting—often a stickyissue for companies with a mix of business lines and global reach.Uber executives also need to communicate the story of its variedbusinesses to experienced fund managers and retail investors whoare considering buying stock in the company. According to yourresearch on Uber and Lyft, will Lyft undertaking an IPO before Uberhelp it compete more effectively against Uber? Why or why not? Whyare Uber's risk disclosures likely subjected to more scrutiny fromthe U.S. Securities and Exchange Commission than was Lyft? Will youinvest in Lyft or Uber? Why or why not? Please discuss

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3.6 Ratings (362 Votes)

1 It can be analysed from the fact that maximizing shareholders wealth is significant finance objective function It is so because despite of longterm consequences providing return to investors instantly boots their See Answer

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1. In class, we address the importance of maximizingshareholders’ wealth. However, it seems like maximizing stockprices does not make sense, because investors focus on short-termresults and don’t care about long-term consequences. What do youthink? Please discuss. 2. Uber Inc. is planning to issue an IPOthis May. It is known as a ride-hailing business and just likeLyft. Both companies offer ride-sharing, carpooling, bike andscooter rentals for short trips on-demand. But Uber’s structure isway more complicated than its smaller rival: it also generatessignificant revenue from three other business such as Uber Eats andUber Freight. Also, it operates in 63 countries and nearly 700cities, compared to Lyft which only operates in the U.S. andCanada. Because of its complexity, regulators are more likely toscrutinize how Uber approaches segment reporting—often a stickyissue for companies with a mix of business lines and global reach.Uber executives also need to communicate the story of its variedbusinesses to experienced fund managers and retail investors whoare considering buying stock in the company. According to yourresearch on Uber and Lyft, will Lyft undertaking an IPO before Uberhelp it compete more effectively against Uber? Why or why not? Whyare Uber's risk disclosures likely subjected to more scrutiny fromthe U.S. Securities and Exchange Commission than was Lyft? Will youinvest in Lyft or Uber? Why or why not? Please discuss