**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.