Finance

Chapter 1 collective Finance and the Financial Manager origin 4 What be the main advantages and disadvantages of organizing a firm as a toilet? Advantages: Limited liability, liquidity, infinite life Disadvantages: image taxation, separation of ownership and control paradox 8 What is the most(prenominal) important type of decision that the financial private instructor makes? The investment decision is the most important decision that a financial manager makes, as the manager must throttle how to put the owners money to its best use. Problem 10 Corporate managers go a direction for the owners of the corporation. Consequently, they should make decisions that be in the interests of the owners, rather than their own. What strategies are pull inable to shareholders to help ensure that managers are motivated to act this way? Shareholders can do the following. i. procure that employees are paid with society stock and/or stock options. ii. Ensu re that underperforming managers are fired. iii. frame contracts that ensure that the interests of the managers and shareholders are closely aligned. iv. dupe hostile takeovers.

Problem 13 You are the chief operating officer of a high society and you are considering enter into an agreement to fuddle your company buy another company. You gauge the price tycoon be too high, but you testament be the CEO of the combined, much larger company. You know that when the company gets bigger, your compensate and prestigiousness will increase. What is the nature of the agency competitiveness here and how is it cogitate to ethical considerations? ! There is an ethical quandary when the CEO of a firm has opposite incentives to those of the shareholders. In this case, you (as the CEO) have an incentive to potentially overpay for another company (which would be damaging to your shareholders) because your pay and prestige will improve. Problem 14 What is the residual amid a public and private corporation? The...If you exigency to get a full essay, order it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay