Natural Market Share: In Search of Jensen's Corporate Objective Function
9 Pages Posted: 15 Feb 2009 Last revised: 17 Feb 2009
Date Written: February 15, 2009
Building on Jensen's theory of corporate value maximization, this paper specifies a natural market share function - one that maximizes earnings. By way of illustration, the result is applied to the analysis of natural market share for a hypothetical merger between Federal Express [FDX] and Thomas Nationwide Transport [TNT], based on the 2007 financial statements of five international cargo air carriers.
Keywords: Market share, objective function, optimal expenses, earnings maximization, cargo air carriers
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