Aswath Damodaran – Session 4 (MBA): Closing the books on the objective function
In this session, we looked at alternatives to stock price maximization as an objective and noted that the alternatives all come with their own trade offs. In particular, top-down based management systems tend to have trouble with systematic problems (across many firms) and picking an intermediate objective (like increasing market share) can lead you to lose focus. I concluded with a pitch for market-based systems, because they come with built-in correction mechanisms.
Slides: http://www.stern.nyu.edu/~adamodar/po…
Add on Slides: http://www.stern.nyu.edu/~adamodar/po…
Post class test: http://www.stern.nyu.edu/~adamodar/pd…
Post class test solution: http://www.stern.nyu.edu/~adamodar/pd…
