How could overconfidence affect the financial manager of the firm and the firm’s shareholders?

Q: What do you think is the main issue of conflict between the stockholders and managers?

A: There are various conflicts of interest that can impact manager's decisions to act in shareholders'…

Q: How is it possible for a firm to grow itself out of business and how can this be guarded against as…

A: Finance managers are accounting experts concerned for a company or organization's financial…

Q: ch one of the following actions by a financial manager creates an agency problem?   Lowering…

A: The aim of financial management is to maximize the value for shareholders and create value of…

Q: What types of risks should shareholder wealth-maximizing managers seek to offset in a firm they are…

A: Explanation:- The principle of maximizing shareholder value (SWM) states that the goal of every…

Q: What are some actions an entrenched management might take that would harm shareholders?

A: Entrenched management basically means that the senior management has grown so powerful that they can…

Q: is it possible for a company to expand itself out of existence, and how can this be avoided as a…

A: Introduction : When a company goes out of existence and shuts down its operations, it is stated that…

Q: What is the primary objective of the financial manager? How are they different from other manager

A: Financial manager is a person who is  responsible for carrying out various financial functions of an…

Q: What is one of the ways that accounting is used to direct and control the manager of a corporation?…

A: Accounting is referred to as a process under which the transactions of a company are recorded,…

Q: What dangers are there in misrepresenting the financial performance of your company?

A: The objective of the question is to understand the potential risks and dangers associated with…

Q: What are the possible actions that a firm can take if it experiences a financial failure?

A: Financial failure of the firm could be resulted because of overspending, higher degree of illiquid…

Q: What goals might be persued by managers instead of maximization of shareholders wealth

A: Shareholders are individuals, entities, or institutions that own shares or equity in a company. When…

Q: Why might one expect managers to act in shareholders' interests? Give some reasons.

A: Managers would act in shareholders’ interests as a result of they need a duty to act in their…

Q: What is the possible agency conflict between inside owner/managers and outside shareholders? What…

A: What is the possible agency conflict between inside owner/managers and outside shareholders?…

Q: Why would managers misrepresent the financial results oftheir companies?

A: Fraud:   It is an intentional misappropriation of the assets or the financial records of an…

Q: How does the activity of investors in the financial market affect the decisions of executives within…

A: The financial market is a platform where investors trade for stocks. Investors trading over the…

Q: How does the activity of investors effect the decisions of executives within the firm?

A: There is no direct connection between the activities of investor  in financial markets with the…

Q: match the correct description with the correct term. Descriptions Terms The level and nature of risk…

A: Descriptions Terms The level and nature of risk attributable to a firm’s activities and…

Q: As a corporate financial manager, what steps could you take to protect your company from a liquidity…

A: As a corporate financial manager, what steps could you take to protect your company from a…

Q: How does the activity of investors in financial markets affect the decisions of executives within…

A: Introduction: A financial market is a market in which people exchange financial instruments,…

Q: how does the existence market for corporate control affect firm performance?

A: Market for corporate control: When the resources of the company are not utilized to its fullest…

Q: why is it essential for a corporate manager to balance the interests of society and shareholders?

A: Corporate social responsibility or CSR is a type of business model that makes the companies socially…

Q: Why should a financial decision maker such as a corporate treasurer or CFO be concerned with market…

A: The financial decisions of the business include the raising of funds from different sources and the…

Q: What are the conflicts between shareholders and managers

A: Shareholders are real owners of company as they hold proportion of common stock in company but due…

Q: A company's financial management and stockholders might be harmed by their overconfidence.

A: Introduction: The corporation may either sell its equity shares to the public or purchase them on…

Q: How does the activity of investors in financial markets affect the decision of executives within the…

A: The financial market is a platform that provides the facility to the investor to purchase and sell…

Managing Agency Conflict

Conflict is defined as an act of disagreement between two parties caused by uncertainties between them. The conflict has a negative outcome that affects both parties involved in the argument. Conflict arises when the parties' thoughts do not align or go in opposite directions. Conflicts have negative consequences for both the individual and the business. As a result, it should be avoided.