Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
4th Edition
ISBN: 9780134083278
Author: Jonathan Berk, Peter DeMarzo
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
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.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
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?
CEO compensation design is effective in controlling the behavior in their decision making. How a compensation package could possibly work in adjusting a CEO’s risk taking behavior (in investments) and in balancing long-term vs. short term interests of a company?
Chapter 1 Solutions
Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
Ch. 1.1 - Prob. 1CCCh. 1.1 - Prob. 2CCCh. 1.2 - Prob. 1CCCh. 1.2 - Prob. 2CCCh. 1.3 - What are the important changes that have occurred...Ch. 1.3 - What is the limit order book?Ch. 1.3 - Prob. 3CCCh. 1 - Prob. 1PCh. 1 - What does the phrase limited liability mean in a...Ch. 1 - Prob. 3P
Ch. 1 - Prob. 4PCh. 1 - Prob. 5PCh. 1 - You are a shareholder in a C corporation. The...Ch. 1 - Prob. 7PCh. 1 - Prob. 8PCh. 1 - Prob. 9PCh. 1 - Prob. 10PCh. 1 - Prob. 11PCh. 1 - Prob. 12PCh. 1 - Prob. 13PCh. 1 - Prob. 14PCh. 1 - Describe the important changes that have occurred...Ch. 1 - Prob. 16PCh. 1 - Explain how the bid-ask spread is determined in...Ch. 1 - Prob. 18PCh. 1 - Suppose the following orders are received by an...
Knowledge Booster
Similar questions
- What is corporate social responsibility, and who are the stakeholders?arrow_forwardWhich statement best describes the essence of the Agency Problem? Shareholders allocate decision-making authority to the managers, who might act dishonestly or guard their own self-interest. Managers and shareholders always have aligned interests and goals. Managers always act in the best interest of shareholders. Shareholders retain all decision-making authority.arrow_forwardWhich of the following best describes the role that corporate governance plays in a company? Shareholders vote to decide who should be members of the board of directors. Holding the management team accountable to shareholders and other stakeholders for how they use the entity's resources. Management often is compensated based on the company's profitability. Management decides which accounting principles are the most appropriate.arrow_forward
- Helparrow_forwardIs the Strategic Stakeholder model of Corporate Social Responsibility closer to the Shareholder model or the Multifiduciary Stakeholder model? Explain all three models and provide justification for your answer. Please explain brieflyarrow_forwardWhich of the following best describes the role of corporate governance in organizations? OA. Limiting access to customer bases ○ B. Reducing the volume of information ○ C. Decreasing profitability OD. Ensuring ethical conduct and accountabilityarrow_forward
- Managers of corporations need to act in an ethical manner O because ethical behavior is its own justification. O because a business must be trusted by investors, customer and the public if it is to succeed. O because business managers must answer to a higher authority. O because ethics violations will be punished by the law.arrow_forwardHow do the shareholders of an organization can encourage its manager to act in a way which is consistent with the objective of maximization of shareholders' wealth?arrow_forwardwhat is the importance of corporate social responsibilityarrow_forward
- Firms should focus on promoting the interest of all stakeholders rather than prioritising only the interest of shareholders. Critically discuss this statement.arrow_forwardWe have been talking about the numbers a lot as far as financial management, it should be worth noting that there are human perspectives to consider as well. Answer the following questions: What do we need to consider as financial managers from an employee perspective when mergers or acquisitions occurs? How does this potentially affect the work environment and performance of the groups? What might we be able to do to mitigate the challenges?arrow_forwardCorporate social responsibility goes beyond serving the stakeholders of a company. * TRUE FALSEarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Business/Professional Ethics Directors/Executives...AccountingISBN:9781337485913Author:BROOKSPublisher:Cengage
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
Intermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Business/Professional Ethics Directors/Executives...
Accounting
ISBN:9781337485913
Author:BROOKS
Publisher:Cengage
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College