In Previous Chapters,it Was Stated That Financial Managers Should Act

question 49

Essay

In previous chapters,it was stated that financial managers should act to maximize shareholder wealth.Why are the efficient markets hypothesis (EMH),the CAPM,and the SML so important in the accomplishment of this objective?

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Definitions:

Organisational Design

The process of shaping an organization's structure and roles to align with its strategies, goals, and environment, ensuring it can operate effectively.

High Performance

Achieving significantly better outcomes or efficiencies, usually in the context of organizational or individual work, through effective strategies and practices.

Satisfaction

The feeling of pleasure or contentment arising from the fulfillment of one's desires, expectations, or needs.

Mechanistic Designs

Mechanistic designs are centralised with many rules and procedures, a clear-cut division of labour, narrow spans of control and formal coordination.