This video illustrates how the NASDAQ works Summary There are a wide variety of

This video illustrates how the nasdaq works summary

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This video illustrates how the NASDAQ works: Summary
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There are a wide variety of options of exchanges that firms can trade on and knowing  the differences can provide insight into the firm. Firms may have chosen a particular  exchange because of its reputation, ease of access, listing requirements or even  maintenance requirements. The point is that since each exchange operates as a  marketplace it is a good idea to have a firm understanding of the rules associated with  each of the platforms. Goal of a Firm Introduction When we discuss businesses we should be able to identify one overarching goal. It is  not practical to think that a firm can equally strive for multiple goals. If we are to limit our discussion to a for-profit business we can broadly state that the goal is to make money  or add value for the owners. Notice that the goal is not to make customers happy or any other stakeholder pleased. The first and foremost goal is dedicated to the owners, the  shareholders. Learning Materials Profit maximization Historically we have concluded that the goal of a firm is profit maximization. However, profit maximization has the potential of being a short sighted goal. If you think about it profit is reported on a quarterly basis and can easily be manipulated from one quarter to the next. It is easy enough to cut cost immediately but this may have lasting negative implications on firm value if it reduces the quality of outputs. This potential for manipulation has led to a more robust goal, shareholder wealth maximization. Shareholder wealth maximization Share prices can be defined as the present value of all future cash flows. Given that share prices are looking to future values to arrive at a price we can conclude that this is a long term measure. Therefore to tie an objective to this long term measure should lead to a more logical goal. Additionally, since this is a long term figure it is not as easily manipulated and can provide a more appropriate gauge of the firm. These facts, along with others, have made shareholder wealth maximization the most commonly cited goal of a corporation. However, we are now seeing stakeholder theory and the potential for a corporate goal to mature from this theory is not unfathomable. Stakeholder theory A stakeholder is any individual that is directly impacted by a firm and its actions. This can be any individual from the customer or employee all the way to a neighbor that is adjacent to your business. The idea is that it is not practical to make all people equally happy but that a firm should strive to
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maximize the value to all stakeholders. In other words a business would consider ALL stakeholders interest when making decisions. Whether or not this is a realistic goal or just an admirable one it is a potential.
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