Session 3: The Objective in Corporate Finance - Reality

Looks at the real world issues with maximizing stock prices.

[feamatar]

It is astounding to listen to these words of wisdom in 2023 while knowing that Iger will stay for another 3 years and much of the current malady of Disney is his making.

[AswathDamodaranonValuation]

Firm value is debt plus equity. In common parlance, it is usually measured with enterprise value. You could reframe the objective as maximizing enterprise value.

[njabulov.hadebe]

I love how nice and clean and straightforward these videos are!!!!

[marcoantoniomedrano]

Really I enjoy these classes. In the MBA I took a course in CFM. Many questions and doubts on running a company were clarified in this course. Many situations that I have lived as consultant in many companies seems to fix to many of the descriptions of these clases. Personally I have foun very useful and I have found answer to many questions with the perspective of the Professor Damodaran and his book.

[shawn]

The Art of War immediately jumps to mind. At some point, the war itself becomes the purpose of the war, and that's when everything goes downhill. This is very similar to your description of gaining market share just for the sake of building market share. The people in charge forget what their ultimate objective was.

[JapaneseStockInvestor]

He is great YouTuber.
I really admire you.

[emikojung]

I am incredibly thankful for this. Watching the rest of your lesson before my final!!! :')

[northpenguin]

Thank you sir. thank you so much. I am really thankful for your work.

[AlexVoxel]

Very clear ideas, lesson and point, thank you!

[dakitoalemu]

Nice presentation and am happy for watch this video. But I do have one technical question that I want to get your clarification. If we substitute or use firms value instead of stock price in order to measure wealth maximization, how can we measure firms value? I guess the former literatures used stock price to evaluate wealth maximization since it's easy to find the value of stock in the market.  

[rodrigoml]

Thank you for sharing so good content.

[giannianiello]

🎯 Key Takeaways for quick navigation:

02:51 Governance *Alternativa*
Comitati sostitutivi,
Evitare errori *elitari.*
05:40 Obiettivi *Intermedi*
Scelte obiettivi,
Riconoscere limiti.
07:03 Auto-Correzione *Mercati*
Mercati efficienti,
Nessun ego.
10:09 Caso *Disney*
Pressione azionisti,
Governance efficace.

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[hi-xkwd]

What does he mean by market-based decision?

[mudibluz]

Can someone explain to me why the answer is D for question 5 of the post class test? I would assume that in a illiquid poorly functioning emergent market you should focus on revenue growth since the company is being held up by bond/lender. That would allow the company to survive current market conditions. To max shareholder wealth in a rocky market would be like swimming against the tide.

[jordanrobinson]

I understand why it's pointless to increase market share for the sake of increasing market share, but what about earnings or revenue?

[Xopher]

Answer: Nope. In fact, Disney will adapt a radical cult-like ideology.