Define patient and impatient capitalism and discuss how each may lead to different decision-making in the shareholder wealth maximization model
What will be an ideal response?
Answer: Patient capitalism may be defined as a focus on long-term shareholder wealth maximization and is often associated with management focusing on long term investments with less emphasis placed on short-term or trendy objectives. On the other hand, impatient capitalism could be described as a destructive focus on the short term by both management and investors. These differences in the time horizon could lead to different and perhaps inferior decisions by existing management and ultimately be costly to the shareholders.
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