Suppose you own stock at AC Milan Berhad. The current price per share is RM30. Another...

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Accounting

Suppose you own stock at AC Milan Berhad. The current price pershare is RM30. Another company has just announced that it wants tobuy your company and will pay RM40 per share to acquire all theoutstanding stock. Your company’s management immediately beginsfighting off this hostile bid. Is management acting in theshareholders’best interest? Elaborate on your opinion on thismatter.
Profitability based on short-term goals could be at the expenseof long term sustainability of an organization, discuss.
Critically evaluate main reasons that an agency relationshipexists in the corporate form of organization.

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a Before evaluating an acquisition or a bid from prospective buyer the management and the stockholders should consider the expected value of the company in the future years The offer from other company to pay RM 40 is no worth accepting if the future expected value of each share is greater than 40 The shareholder management has to carefully estimate the future value of share which can be calculated using Expected earnings method or Dividend model etc If the perceived value is See Answer

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Suppose you own stock at AC Milan Berhad. The current price pershare is RM30. Another company has just announced that it wants tobuy your company and will pay RM40 per share to acquire all theoutstanding stock. Your company’s management immediately beginsfighting off this hostile bid. Is management acting in theshareholders’best interest? Elaborate on your opinion on thismatter.Profitability based on short-term goals could be at the expenseof long term sustainability of an organization, discuss.Critically evaluate main reasons that an agency relationshipexists in the corporate form of organization.