Question: Why do executives spend so much time and effort on
Why do executives spend so much time and effort on communicating with noise traders if intrinsic investors ultimately drive a company’s share price?
Answer to relevant QuestionsWould a company’s share price benefit from having fewer traders and more fundamental investors among the company’s shareholders? Do you think it is possible for a company to shape its shareholder base to maximize its share price? What would a company have to do? What are the steps involved in constructing a portfolio? Discuss potential hurdles in executing the analytic approach. How can an acquisition create value for the combined entity’s shareholders but not for the acquirer’s shareholders? Identify and explain the significance of four factors that complicate a manager’s decision to divest a business unit.
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