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Historical evidence shows that this rarely happens following a balancesheet recession. They encapsulate the self-reinforcing interactions between perceptions of value and risk, risk-taking and financing constraints which translate into financial booms and busts. Financial cycles differ from business cycles.
Corporate finance academics argue that firms should act to maximise shareholder value, since shareholders are the owners of the firm. For example, Amazon earned only modest profits from 2004 to 2015, choosing instead to focus on increasing market share and developing new products. Economics assumes that firms aim to maximise profits.
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