Answered: "Financial manager

Business

Finance

"Financial manager

Business/Professional Ethics Directors/Executives/Acct

8th Edition

ISBN:9781337485913

Author:BROOKS

Publisher:BROOKS

Chapter5: Corporate Ethical Governance & Accountabililty

Section: Chapter Questions

Problem 13.2EC

See similar textbooks

Related questions

Q: When Reserve Bank actions cause interest rates on newly issued bonds to decrease from 6% to 5%, the…

A: There is an inverse relationship between interest rates and bond prices. If the interest rates…

Q: cashflow diagram.

A: The cash flow statement represents the inflow and outflow of cash from the company in a particular…

Q: ge can be constructed for $ 20,000 with a life of 30 years, after which it can be rebuilt at the…

A: In Balancehsheet, capitalised cost is the cost which is incurred today and present value of future…

Q: Pedro Gil Company must maintain a compensating balance of P50,000 in its checking account as one of…

A: Given: Loan amount = P500000 Interest paid on loan = 6% Compulsory compensating balance = P50000…

Q: Lindsay is 25 years old and has a new job in web development. She wants to make sure that she is…

A: Data given: Investment amount per year = $ 12,000 N= 30 years Rate = 7% p.a. Required: Amount in her…

Q: The owner of a downtown parking lot has employed a civil engineering consulting firm to advise him…

A: Present value of annuity Annuity is a series of equal amount payment at equal interval for a…

Q: The Turnip Company plans to issue preferred stock. Currently, the company’s stock sells for $220.…

A: SOLUTION : GIVEN, Par value = $200 Dividend rate = 8% Issued price = $210 Now, Firstly we have to…

Q: Leon has a gross estate estimated at $14.3 million. He is not married but does have two adult…

A: Given in this question is the information regarding Leon whose, Gross estate is estimated = $14.3…

Q: What is the bond’s yield to maturity? (Do not round intermediate calculations. Enter your answer as…

A: Yield to maturity refers to the total return generated by a bond until it matures. Yield to maturity…

Q: The least risky capital market security is a.preferred stock. b.common stock. c.corporate bonds.…

A: The primary purpose of capital markets is to offer financial products like stocks and bonds. Stocks…

Q: elix Jones, a recent engineering graduate, expects a arting salary of $35,000 per year. His future…

A: Salary grow by fixed percentage that salary is geometric sequence of growing annuity and the present…

Q: Luther Industries has a dividend yield of 3.6% and a cost of equity capital of 14%. Luther…

A: Cost of Equity = Dividend Yield + Capital gains Yield Capital Gains Yield is equal to the growth…

Q: 10. If money is worth 8% compounded quarterly, what quarterly savings is required in order to have…

A: Quarterly compounding refers to the amount of interest earned on a quarterly basis on an account or…

Q: SHOW SOLUTION 3.The maintenance cost of a new equipment is projected to start at the end of the 2nd…

A: The annual equivalent maintenance cost is the equal amount of cost incurred on equipment during the…

Q: How much debt does the company now have, to the nearest thousand dollars? How much equity? What is…

A: Weighted average cost of capital (WACC) refers to the joint cost of company's capital from all the…

Q: 4. Mr. Torres borrows P 150,000 and agrees to pay it with interest at 16 % compounded quarterly…

A: Given, Loan amount is P 150,000 Interest rate is 16% compounded quarterly Quarterly payments is…

Q: Problem: Find the nominal rate, which if converted quarterly could be used instead of 15 %…

A: The nominal interest rate is the rate of interest prior inflation is taken into account. The…

Q: 8. Nichols Inc. is considering a project that has the following cash flow data. What is the…

A: The internal rate of return (IRR) is a financial metric that is used to evaluate the profitability…

Q: Analysts expect Exxon Mobil stock to pay a dividend of $3.43 in 1 year and is expected to sell for…

A: Expected dividend of Stock in year 1(D1) = $3.43 Expected Selling Price of Stock in year 1(P1) =…

Q: B. He has decided he wants to save $1,000,000 before he retires. If he saves for 30 years, earning…

A: Future value (FV) = $1,000,000 Interest rate = 6% Monthly interest rate (r) = 6%/12 = 0.50% Period =…

Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery…

A: NPV is the difference between present value of cash inflows and initial investment NPV =PV of all…

Q: Hannah plans to invest $125 at the end of each month into an RRSP for the next 5 years. If she earns…

A: We need to use financial calculator to solve this problem. The following inputs need N=Periods…

Q: To estimate the total price for a project, we need to consider 5 requirements to develop the…

A: Pricing is referred as the process of decision making, which helps in establishing the value of…

Q: Could I Industries just paid a dividend of $1.45 per share. The dividends are expected to grow at a…

A: Stock price is defined as the maximum price that an investor is ready to pay for a stock. It is…

Q: How much in each of the quarterly installments if rate of interest 10% compounded bi-monthly?

A: A stream of equal cash flows paid or received periodically is termed as annuity. Annuity is either…

Q: During recessionary periods, bonds that were issued many years ago have a higher coupon rate than…

A: A Bond refers to an instrument that represents the loan being made by the investor to the company…

Q: Suppose Capital One is advertising a 60-month, 5.14% APR motorcycle loan. If you need to borrow…

A: The monthly payment can be calculated with the help of present value of annuity function.

Q: A portfolio is comprised of equal weights of two stocks labeled Stock X and Stock Y. The covariance…

A: Covariance between stock X and stock Y (CovX,Y) = 0.10 Standard deviation of stock X (SDX) = 0.50…

Q: Suppose a ten-year, $1,000 bond with an 8.5% coupon rate and semiannual coupons is trading for…

A: Here,

Q: Your retired client has accumulated investment and retirement assets totaling $5,981,000. Assume the…

A: In order to calculate the return on investment with given inflation rate, we are firstly required to…

Q: 16. Use Table 11-2 to solve the problem. How much (in $) must be invested today at 6% compounded…

A: Future value (FV) = $7000 Interest rate = 6% Quarterly interest rate (r) = 6%/4 = 1.50% Period = 3…

Q: 1. Sources of Tax Laws 2. Constitutional Limitations 3. Elements of Sound Tax System 4.…

A: A tax is a necessary fee or financial charge imposed by a government on an individual or an…

Q: The firm's bank charges $18 per wire and $0.50 per EDT. The EDT takes one day longer to clear. The…

A: Since Minimum Transfer Balance (TBAL)=Incremental costNo. of days saved×(Investment Opportunity…

Q: Taylor Swift, a college student of USeP decides to get a student loan amounting to $4000 with an…

A: Given, The loan amount is $4000 Rate is 5% compounded monthly Monthly payment is $250

Q: 1. Why do we study financial management? Enumerate its benefits to the success of a business.

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: 4. What is the equivalent amount today of an annual deposit of Php200000 for 15 years if money is…

A: Solution : Equivalent amount today of annual deposit means that amount which was represent the…

Q: (b) What is the present value of $30,700 to be received at the end of each of 5 periods, discounted…

A: SOLUTION : GIVEN, Future value = $30,700 Number of times = 5 Rate = 10% = 0.10

Q: What critical success factors should all investment films involved in stockbroking and asset…

A: Asset management involves the practice of collecting, maintaining, and trading investments with the…

Q: Patrick makes payments of $250 per month at the end of each month. At the end of 10 years, he wants…

A: The rate of interest required to have the desired amount can be calculated with the help of rate…

Q: Ester and George want to make soup. In order to get the right balance of ingredients for their…

A: Particular Cost per pound Pound Potatoes 3.23 3 Cod 2.27 2 Fish broth 3.27 4

Q: The cc risk free rate r = -0.15% (yes, r< 0). The spot price for TFS is So = 42.50, the cc dividend…

A: The replicating portfolio is a method of finding the value of an option by considering the…

Q: A stock currently is being sold for $95, with a dividend yield of 6.2% and a dividend growth rate of…

A: SOLUTION : GIVEN, Dividend yield = 6.2% Growth rate = 4.2% Share price = $95 Now, Firstly we have…

Q: 10. A firm bought an equipment for ₱56,000. Other expenses including the installation amounted to…

A: In order to calculate the book value at the end of a prescribed period using sinking fund method, we…

Q: Assume that Riverside Corp. from the United States will receive 400,000 pounds in 180 days. The…

A: Solution : Money Market Hedge help a domestic company in reducing the exchange rate and currency…

Q: When calculating future value, the _____ the interest rate, the smaller the future value amount. a.…

A: Future Value is the value of current amount in the future on a specific date at a specific rate. It…

Q: P450 P370 P290 P210 P130 P50 P50 1 2 3. 6. i = 10% P F

A: Present Value: The present value is the value of cash flow stream or the fixed lump sum amount at…

Q: Commercial Hydronics is considering replacing one of its larger control devices. A new unit sells…

Q: A real estate development company is planning to build five homes, each costing $175,000, in 2 1…

A: Total amount needed in the future (F) = $175000 * 5 = $875000 n = 2.5 years = 5 semiannual periods r…

Q: QUESTION 9 Suppose that the forward rate today for the period between 1 year and 2 years in the…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want…

Q: Argyl Manufacturing is evaluating the possibility of expanding its operations. This expansion will…

A: Cost of land = $120,000 Cost of building = $140,000 Cost of equipment = $250,000 Installation cost =…

Concept explainers

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.

Question

Explain in full detail why the following statement is false: "Financial managers should not focus on the present stock value of the company. Instead, they should focus on the profitability of the company. Doing so will result in increasing the value of the stock.

Approach to decide on the efficient procurement and investment of funds for the day-to-day operations of a business. Financial management aims at profit maximization, and it includes financing and capital budgeting.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Explain how managers should not focus on the current stock value because doing so will lead to an overemphasis on short-term profits at the expense of long-term profits.
Evaluate the following statement: Managers should not focus on the current stock value because doing so will lead to an overemphasis on the short term profits at the expense of long-term profits.
Discuss on the statement “Managers should not focus on the current stock value because doing so will lead to an overemphasis on short-term profits at the expense of long term profits.
You observed that high-level managers make superior returns on investments in their company’s stock. Would this be a violation of weak-form market efficiency? Would it be a violation of strong-form market efficiency?
Evaluate the following:Managers should not focus on the current stock value because doing so will lead to an over emphasis on short term profits at the expense o long term profits
What are some of the risks an investor would face when investing in a stock? In addition to the business risk coming from the type of business environment that your company operates in, what additional risk would be of concern to an investor? The company might be mismanaged and do poorly or go out of business. The company's stock market return might be wildly unpredictable as the operating performance might be unstable. The company's competitors might do a better job and take market share away? The list goes on and on... What risks would you face if you bought 100 shares of Tesla?
A company could use other gains and losses to manipulate its stock price. reduce reported sales, general and administrative expenses. exaggerate income from operations. do all of these.
TRUE or FALSE: Managers always attempt to maximize the long-run value of their firms' stocks, or the stocks' intrinsic values. This is exactly what stockholders desire. Thus, conflicts between stockholders and managers are not possible.
Managers often complain that the stock market is short-sighted and focused on accounting earnings. In your post, make a case to convince your manager that this view is either true or not true.
If the stock market is efficient, why do companies manage their earnings? O To avoid violating debt covenants. O To receive bonuses based on reported earnings. O Because companies do not believe the Efficient Market Hypothesis. O All of the above.
If you are in financial hardship, explain what it means. If we suppose that financial hardship occurs, explain how and why financial distress would make a company's stock more hazardous.
“When the stock market declines the net worth of companies decreases, causing the problem of asymmetric information to decrease as well.” Is this statement true, false, or uncertain? Explain your answer.