In a competitive marketplace, if managers deviate too far from making decisions that are consistent with shareholder wealth maximisation, they risk being disciplined by the market.Part of this discipline involves the threat of being taken over by groups who are more aligned with shareholder interests.

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This statement is true. In a competitive market, the market provides discipline to managers to ensure they make decisions that align with shareholder wealth maximisation. This includes the threat of being taken over by groups who are more aligned with shareholder interests.

In a Competitive Marketplace, If Managers Deviate Too Far from Making