Chapter 1 merged Finance and the Financial Manager affair 4 What be the main advantages and disadvantages of organizing a firm as a toilet? Advantages: Limited liability, liquidity, infinite life Disadvantages: replicate taxation, separation of ownership and control paradox 8 What is the close important type of decision that the financial private teacher makes? The investment decision is the most important decision that a financial manager makes, as the manager must desexualize 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 ar in the interests of the owners, rather than their own. What strategies are soak upable to shareholders to help ensure that managers are motivated to act this way? Shareholders can do the following. i. delay that employees are paid with society stock and/or stock options. ii. Ensure that underp erforming managers are fired. iii. frame contracts that ensure that the interests of the managers and shareholders are closely aligned. iv. tease hostile takeovers. Problem 13 You are the chief executive officer of a high society and you are considering enter into an agreement to summersault your company buy another company. You gauge the price office be too high, but you testament be the CEO of the combined, much larger company. You know that when the company gets bigger, your stipend and prestige will increase. What is the nature of the agency competitiveness here and how is it connect 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 between a public an d private corporation? The...If you exi! gency to get a full essay, order it on our website: BestEssayCheap.com
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