Principles of Managerial Finance
Principles of Managerial Finance
17th Edition
ISBN: 9781323419656
Author: Gitman
Publisher: PEARSON
Question
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Chapter 1, Problem 1.5P

a)

Summary Introduction

To discuss: The agency problem of the front desk receptionist, cost incurred from an agency issues, and ways to resolve the issues.

Introduction:

The managers of the firm are appointed to work in the best interest of the investors. In a corporation, the control of an organizational structure and separation of ownership will give rise to conflicting interest. Every managers face ethical dilemma of whose interest to serve their own or the investors to whom he/she is responsible. This agency conflict takes place when there are different stakeholders in an organization because everyone will have their own interests.

b)

Summary Introduction

To discuss: The agency problem of the division managers, cost incurred from an agency issues, and ways to resolve the issues.

c)

Summary Introduction

To discuss: The agency problem of the chief executive officer (CEO), cost incurred from an agency issues, and ways to resolve the issues.

d)

Summary Introduction

To discuss: The agency problem of the branch manager, cost incurred from an agency issues, and ways to resolve the issues.

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You've collected the following information from your favorite financial website. 52-Week Price Dividend Hi 77.40 Lo Stock (Dividend) Yield % PE Ratio Close Price Net Change 10.43 Acevedo .36 2.6 6 13.90 -.24 55.81 33.42 Georgette, Incorporated 1.54 3.8 10 40.43 -.01 131.04 70.05 YBM 2.55 2.9 10 89.08 3.07 50.24 35.00 13.95 Manta Energy .80 5.2 6 20.74 Winter Sports .32 1.5 28 15.43 ?? -.26 .18 According to analysts, the growth rate in dividends for YBM for the next five years is expected to be 21 percent. Suppose YBM meets this growth rate in dividends for the next five years and then the dividend growth rate falls to 5.75 percent, indefinitely. Assume investors require a return of 14 percent on YBM stock. According to the dividend growth model, what should the stock price be today? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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