If you ask any CEO of a company, he or she would tell you that their main objective for running the company is to maximize shareholders’ value.
Maximizing shareholders’ value is subjective because as shareholders, we all want different kind of things. Some want better sustainability reporting or others may want higher dividends. There are probably another group who wants the company share price to ascend upwards in due time. But does share price equals to maximizing shareholders’ value?
There are researchers who went around different companies to interview their CEOs and they divulged that they get mounting pressure to increase the share price of the company and inflate the market capitalization. For anyone who are unsure what market capitalization is, they are basically the total value of the number of shares the company issued multiplied by the share price the company is trading. As you can see, ......