Firms must provide the right incentives if they are to get to______ focus on long-run value maximization. Conflicts exist between managers and stockholders and between stockholders (represented by managers) and _. Managers' personal goals may compete with shareholder wealth maximization. However, managers can be motivated to act in their stockholders' best interests through (1) reasonable_____ packages, (2) firing managers, and (3) the threat of hostile takeovers. If a firm's stock is undervalued, corporate raiders will see it as a bargain and will attempt to capture the firm in a hostile takeover.

A hostile takeover is a sale, either to the owners of one corporation (called the target group) or to the board, to get the purchase approved, by the other company (called the acquirer).

The strategies used for winning over the stake include the acquisition on the open market of a majority, the sale of a preferential premium for current shareholders from the purchasing business (a tender offer) and the use of existing shareholders ' voting rights (a proxy war).

Access to its distribution channels, its customer base, market share, technology or because the purchaser considers that the acquisition can improve the value of the current objective and take advantage of the appreciation of the stock price.