Corporate Finance
Corporate Finance
3rd Edition
ISBN: 9780132992473
Author: Jonathan Berk, Peter DeMarzo
Publisher: Prentice Hall
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Chapter 1, Problem 10P
Summary Introduction

To Determine: The strategies that are available to shareholders.

Introduction:

A corporation is an organization or a business framed by a gathering of individuals, and it has rights and liabilities isolated from those of the people included. It might be a philanthropic or a non-profit association occupied with activities for the public, private, municipal and city or town, which has been sorted out to make a benefit.

A limited liability ensures that a proprietor cannot lose more cash than he put resources into an investment. At the end of the day, it alludes to the measure of risk a financial specialist takes when he invests resources into an organization. Contingent upon the way an organization is sorted out, the proprietors can really lose more than their investment, if the organization is bankrupted.

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Students have asked these similar questions
Corporate managers work for the owners of the corporation. Consequently, they should make decisions that are in the interests of the owners, rather than in their own interests. What strategies are available to shareholders to help ensure that managers are motivated to act this way? Shareholders can do the following: (Select all the choices that apply.) A. Ensure that employees are paid with company stock and/or stock options. B. Write contracts that ensure that the interests of the managers and shareholders are closely aligned. C. Mount hostile takeovers. D. Ensure that all employees are paid a percentage of the company's revenue E. Ensure that underperforming managers are fired.
Managers of corporations don’t always takeactions that are in the best interest of the corporation’s owners. What are some of those actions, andhow can corporations structure the managementcontract to help control them?
Business Ethics and Corporate Social Responsibility: Do businesses have a responsibility to society or to their shareholders?  Explain your answer.  Do these responsibilities conflict or work together? How do social and profit responsibility relate to CSR?
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