Keynes believed that business leaders behaved rather like sheep when they made their business investment decisions. What was it that explained such behavior, in his view?

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: If markets are truly efficient, does it matter whether firms engage in earnings management? On the…

A: If the company concentrated on earnings management then the market is not truly efficient.

Q: Discuss the concepts of adverse selection and moral hazard. Provide an example of each of these…

A: Adverse selection or negative selection describes a situation where the two parties to a transaction…

Q: Do you think that the so-called equity theories of accounting are really theories in the scientific…

A: Yes. equity theories of accounting are really theories in the scientific sense.  the real owners are…

Q: ou observed that high-level managers make superior returns on investments in their company’s stock.…

A: The Efficient Market Hypothesis (EMH) is a theory in finance that states that financial markets are…

Q: financia

A: The payout policy and the investment policy both are related to the dividend payout, and both are…

Q: It is an axiom that may be characterized by managers making decisions that conflict with the best…

A: Agency problem arises during the time of dissatisfaction or conflict of interest between the…

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: 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: Why is present value one of the most useful concepts in making business decisions?

A: Present value is a concept that assumes that a rate of return could be earned on the funds over the…

Q: What is the significance of Financial Management? What are the advantages and disadvantages of…

A: Financial management: It is the process of organizing, collecting, managing, and distributing funds…

Q: What are the disadvantages of the financial intermediaries and the negative ways they can impact the…

A: A financial intermediary is that entity that acts as a middleman in a financial transaction taking…

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…

Corporate Ethics

Ethics refers to the moral values and principles that guide an individual. Corporate ethics refers to the moral behavior of a company and its employees while conducting business. Business ethics is another name for corporate ethics. Business ethics reflects the purpose of doing the business. Business ethics is the distinction between what is right and wrong in the workplace and the selection of the right set of actions. Every corporate entity follows business ethics to a large extent in order to survive and compete successfully in the market. Corporate entities that strictly adhere to business ethics gain the trust of their stakeholders and thus gain more customers. An organization follows compliance, i.e., following certain business policies, rules, procedures, and practices to deal with the problem arising from the business environment. Business ethics also ensures that they meet compliance requirements as it was connected with the activities of an organization.