Foundations of Financial Management
16th Edition
ISBN: 9781259277160
Author: Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Publisher: McGraw-Hill Education
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Question
Chapter 1, Problem 5DQ
Summary Introduction
To explain:The group that has the ultimate responsibility of securing shareholders’ interests.
Introduction:
Board of Directors:
The board of directors (BOD) refers to a group of people generally selected by the shareholders of the organization by the process of voting. The BOD has the sole objective of safeguarding shareholders’ interests and ensuring that the management operates effectively and efficiently. The head of the BOD is known as the chairperson.
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Chapter 1 Solutions
Foundations of Financial Management
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- 1. How to determine the market value of a publicly traded company, and how does it work? 2. What is the process of determining the value of the privated company? 3. Why the values are important part of business, company mangers, creditors and equityinvestors?arrow_forwardFrom the corporation's perspective, the issuance of its stock is an example of which type of business activity? Select one: a. operating b. financing c. investingarrow_forwardPlzz explain in detailarrow_forward
- A6) Why is private equity a possible solution for raising equity (for non-issuable companies)?arrow_forwardWho are external users in a publicly-traded company? Give examples?arrow_forwardWhich of the following is an example of a principal and an agent respectively Oa Shareholder, Manager b. Manager, owner Ⓒc Company, bondholder Od Shareholder, consumearrow_forward
- Whether a corporation adopts IFRS or ASPE accounting rules affects the accounting cycle. True \sFalsearrow_forwardWhich one of the following is the ultimate objective of modern financial management for a corporation? Earnings maximization Earnings per share maximization Share value maximization Return on assets (ROA) maximization Ooooarrow_forward1arrow_forward
- What does shareholder’s equity includes? Explain them.arrow_forwardWhich financial instrument represents ownership in a corporation and entitles the holder to a share of the companys profits? a. Bond b. Preferred Stock c. Common Stock d. Debenturearrow_forwardH5. Common shareholders have pre-emptive rights which allow them to ____________________. Group of answer choices a) vote on important matters that affect their interest b) sell their shares to the firm at a pre-determined price c) maintain their proportionate share of ownership in the company d) exercise claims on the firm’s assets prior to preferred shareholdersarrow_forward
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