stockholders’ welfare

1. What is the difference between stock price maximization and profit maximization? Under what conditions might profit maximization not lead to stock price maximization?
2. If you were the president of a large publicly owned corporation, would you make decisions to maximize stockholders’ welfare or your own personal interests? What are some actions stockholders can take to ensure that management’s interests and those of stockholders coincided? What are some other factors that might influence management’s actions?

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