Explain why the value of a business may differ under different owners? What is the goal of setting performance targets? what are some of the pitfalls inherent in the way companies sometimes set targets? Why do many value-destroying acquisitions increase earnings per share (ESP)? Solution: Value of a business can be said as to value a business after considering all the factors which may be economic as well as non-economic, social as well as surrounding the society as a whole. The value of a business not only depends upon the economic factors but the non economic or informal factors also play a significant role in it, so as per the owner of the head of the organisation the activities are being undertaken, many of the owners keep an eye only on the economic but some also pay attention to the society as a whole or the stakeholders and not only shareholders, so in that case the value of business may be different under different owners. Goal of setting performance targets, means that to perform a task or an array of tasks certain
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This note was uploaded on 12/05/2011 for the course ACC 134 taught by Professor Erik during the Fall '11 term at Colorado.