Management acting in the shareholders


Problem:

Suppose you own stock in a company. The current price is $25. Another company has just announced that it wants to buy your company and will pay $35 per share to acquire all the outstanding stock. Your company's management immediately begins fighting off this hostile bid. Is management acting in the shareholders' best interests? Why or why not?

Note: Show all workings.

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Accounting Basics: Management acting in the shareholders
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