Overpriced shares:

• Cheaper to raise new capital through secondary share offerings or debt using shares as a security.

• Fends off hostile take overs, since the company is too dear. When a company is taken over it needs only one set of management and top management of the company that is taken over looses jobs - no one wants to loose a job.

• Shareholders love to see share price grow - sale brings them profit, secures jobs for company management.

• Shares are used as a currency during acquisitions, if company shares are overpriced that means they can buy another company on the cheap - paying with the overpriced shares.

Undervalued shares:

• More expensive to raise additional capital through secondary share offerings - for the same amount of capital the management has to offer a bigger chunk of the company; have to offer bigger chunk of a company as a security as well.

• Makes company vulnerable to hostile take overs, company is undervalues - makes it an attractive bargain. Once the company is taken over top management will almost certainly loose jobs.

• Falling price makes shareholders unhappy - they will vote management out.

• Makes difficult to acquire other companies.

Overpriced shares:

• Cheaper to raise new capital through secondary share offerings or debt using shares as a security.

• Fends off hostile take overs, since the company is too dear. When a company is taken over it needs only one set of management. Top management of the company that is taken over loses their jobs - no one wants to lose their job.

• Shareholders love to see share price grow - sale brings them profit, secures jobs for company management.

• Shares are used as a currency during acquisitions, if company shares are overpriced that means they can buy another company on the cheap - paying with the overpriced shares.

Undervalued shares:

• More expensive to raise additional capital through secondary share offerings - for the same amount of capital the management has to offer a bigger chunk of the company; have to offer bigger chunk of a company as a security as well.

• Makes company vulnerable to hostile take overs, company is undervalues - makes it an attractive bargain. Once the company is taken over top management will almost certainly lose jobs.

• Falling price makes shareholders unhappy - they will vote management out.

• Makes difficult to acquire other companies.