2. What Is the Point of Saving Money Forever?
As you might expect, my business students are required to complete a number of finance-related courses and topics to obtain their degrees. The most significant among them by far is our corporate finance course, in which they learn the foundations of managing the finances of a corporation. In this course, they are taught early on that the objective of the modern corporation is to maximize shareholder value. We tell them that all a corporation’s activities—its dividend policy, compensation practices, and even the amount of money it borrows—should be geared toward creating the most value for individual shareholders.
This maximize shareholder value (or MSV) mantra is also emphasized in many of the other ...
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