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83. Sole proprietorships resolve the issue of agency problems primarily by:
84. Agency problems can best be characterized as:
85. Which of the following is
least
likely to represent an agency problem?
86. When managers' compensation plans are tied in a meaningful manner to the profits of
the firm, agency problems:
87. A firm's reputation:
88. Which of the following groups is
least
likely to be considered a stakeholder of the firm?
89. A manager's compensation plan that offers financial incentives for increases in quarterly
profitability may create agency problems in that:
90. One continuing problem with managerial incentive compensation plans is that:
91. Which one of the following forms of compensation is most apt to align the interests of
managers and shareholders?
92. Which of the following is a real asset?
93. Which one of these statements is correct?
94. Short selling involves selling a security:
95. What general factors may influence the decision of whether to organize as a sole
proprietorship, a partnership, or a corporation?
96. Discuss why corporations typically exhibit separation of ownership and management, as
distinguished from sole proprietorships or partnerships.
97. Why is limited liability such an important aspect to investors?
98. Provide at least three examples each of real and financial assets that might appear on
the balance sheet of General Motors.
99. Distinguish between a firm's capital budgeting decisions and its financing decisions by
giving examples of each.
100. Discuss the interrelationship between a firm's financing and its capital structure
decisions.
101. Who are the financial managers in large corporations?
102. Fritz and Frieda went to business school together 10 years ago. They have just been
hired by a midsized corporation that wants to bring in new financial managers. Fritz studied
finance, with an emphasis on financial markets and institutions. Frieda majored in accounting
and became a CPA 5 years ago. Who is more suited to be treasurer and who controller? Briefly
explain.
103. Provide examples of managerial goals other than the maximization of market value.
104. Provide at least two recent examples of unethical behavior by company executives and
the results of that behavior.
105. Develop a case for the interrelationship of ethical decision making by corporate
management and profitability of the firm.
106. Is there a conflict between "doing well" and "doing good"? When there are conflicts, how
may government regulations or laws tilt the firm toward doing good?
107. Describe agency problems in general, and offer at least three examples from
corporations.
108. Complete the table below that compares the differences among corporations, sole
proprietorships, and general partnerships.
109. What two major decisions are made by financial managers?
110. What does "real asset" mean?
111. Who is a financial manager?
112. Why does it make sense for corporations to maximize their market value?
113. Is value maximization always ethical?
114. How do corporations ensure that managers' and stockholders' interests coincide?
115. What actions can shareholders take when the corporation is underperforming and the
board of directors is not aggressive in holding managers to task?
