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How do firms assure managers act in best interest of stockholders?
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The potential conflict of interest between a firms owners and its managers is referred to as what?
agency
What do firms owe their creditors?
Firms will owe their creditors a debt and usually some type of interest.
Why do firms purchase other corporations when they have a loss tot he acquiring firms stockholders?
Firms may purchase other corporations, even if they themselves have losses because they believe the new firm may have products or processes which will generate new income streams. Some firms are making losses, but they have high financial net-worth.
Which group tends to offer the most favorable interest rates?
Brokerage firms
What role does the cost of capital play in the financial decision making of the firms top managers?
What role does the cost of capital play in the financial decision making
What are some actions that stockholders can can take to ensure that management's and stockholders' interest are aligned?
Threat of takeover.Managerial compensation: Managerial compensation is constructed not only to retain competent managers, but to align managers' interests with those of stockholders as much as possible.Direct intervention by stock holders: Today, the majority of a company's stock is owned by large institutional investors, such as mutual funds and pensions. These large institutional stockholders have the ability to exert influence on managers and as a result the firms operations.Treat of Firing: If stockholders are unhappy with current management, they can encourage the existing board of directors to change the existing management, or stockholders may even re-elect a new board of directors that will accomplish the task.Threat of takeover: If a stock price deteriorates because of management's inability to run the company effectively, competitors or stockholders may take a controlling interest in the company and bring in their own managers.
The potential conflict of interest between a firms owners and its managers is referred to as what?
agency
What are some actions that stockholders can take to ensure that management's and stockholders' interestes are aligned?
Threat of takeover.Managerial compensation: Managerial compensation is constructed not only to retain competent managers, but to align managers' interests with those of stockholders as much as possible.Direct intervention by stock holders: Today, the majority of a company's stock is owned by large institutional investors, such as mutual funds and pensions. These large institutional stockholders have the ability to exert influence on managers and as a result the firms operations.Treat of Firing: If stockholders are unhappy with current management, they can encourage the existing board of directors to change the existing management, or stockholders may even re-elect a new board of directors that will accomplish the task.Threat of takeover: If a stock price deteriorates because of management's inability to run the company effectively, competitors or stockholders may take a controlling interest in the company and bring in their own managers.
Should marketing managers or business managers in general refrain from producing profitable products that some target customers want but that may not be in their long-run interest Should firms be expe?
Should marketing managgggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggers or business managers in general, refrain from producing profitable products that some target customers want but that may not be in their long-run interest? Should firms be expected to produce 'good' but less profitable products? What criteria are you using for each of your answers?
What is the Starting salary at trading firms?
Well, i can assure you its not cheap
An equity issue sold to the firms existing stockholders is called?
A general cash offer
Why do managers split their firms stock?
To raise money.
Why it is important for the managers to understand macroeconomics?
Business managers need to know about macroeconomics because firms operate in and are influenced by the behavior of the overall economy. Factors such as interest rates, employment, inflation, money supply, etc., affect the business environment and financial conditions in general, so firms must address macroeconomic issues in their planning and management strategy. Macroeconomic forecasts and strategies are more important for large firms than for small businesses.
What assumptions do owners of modern firms make about managers as agents?
hgh
Is the importance of financial managers to firms with large cash inflows greater than for firms with smaller cash flows?
true
What do firms owe their creditors?
Firms will owe their creditors a debt and usually some type of interest.
How can managers protect the proprietary technology of their firms?
Managers can protect the proprietary technology of their firms by being vigilant. Make sure everything is locked up tight, make sure the employees are trustworthy, and make sure computers are secure and virus free.
