how a firm might use stock options in order to incentivise a manager to work in the shareholders’ best interests

Q: Which one of the following forms of incentives is NOT based on absolute performance?       Stock…

A: Absolute Performance: Absolute performance, as the name suggests, is an assessment of performances…

Q: What is the common agency problem faced by shareholders? Describe TWO (2) situations in which…

A: When the conflicts of interest arise between any relationships then it is referred as agency…

Q: What do you think is the main issue of conflict between the stockholders and managers?

A: There are various conflicts of interest that can impact manager's decisions to act in shareholders'…

Q: What are some actions that stockholders can take to ensure that management's and stockholders'…

A: In a corporation, stockholders and management are two separate bodies. Stockholders are the owners…

Q: Firms must provide the right incentives if they are to get -Select-shareholderscreditorsmanagersItem…

A: Filled in the Blanks    Firms must provide the right incentives if they are to get managers to focus…

Q: Finance Who do shareholders elect to monitor and enforce shareholder interests of a firm? Group of…

A: Shareholders are the owners of a corporation.The shareholders elect the board of directors. The duty…

Q: Suppose you need additional capital to expand,and you sell some stock to outside investors. If…

A: As the proprietor or manager, since the corporation, the advantage from augmented wealth, but also…

Q: Explain what is meant by agency relationships and agency costs. Why management may tend to pursue…

A: Agency Relationship: A fiduciary relationship that involves a principal and an agent is termed as…

Q: How could overconfidence affect the financial manager of the firm and the firm’s shareholders?

A: The company have the option to issue its equity shares to the public for raising capital or…

Q: If a firm could maximize either its current market price or its intrinsic value, whatwould…

A: Answer: Managers should focus on maximizing the intrinsic value. The intrinsic value increases…

Q: Analyze the impact of external factors (i.e., external to the company) on a company’s financial…

A: PESTEL analysis is one of the most important tools used by businesses to understand the industry and…

Q: How can an entrepreneur maximize their investment in the financial section of their company plan

A: Entrepreneur maximize their investment in the financial section of their company plan will be…

Q: What are some actions an entrenched management might take that would harm shareholders?

A: Entrenched management basically means that the senior management has grown so powerful that they can…

Q: Explain how a firm might use stock options in order to incentivize a manager to work in the…

A: It is a duty of a manager to work towards the interest of shareholders/origination because manager…

Q: Do firms have any responsibilities to society at large? ◦Is stock price maximization good or bad…

A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…

Q: What goals might be persued by managers instead of maximization of shareholders wealth

A: Goals of financial management should be so articulated as to help achieve the objective of wealth…

Q: Why might one expect managers to act in shareholders' interests? Give some reasons.

A: Managers would act in shareholders’ interests as a result of they need a duty to act in their…

Q: What is the possible agency conflict between inside owner/managers and outside shareholders? What…

A: What is the possible agency conflict between inside owner/managers and outside shareholders?…

Q: Who are the largest stockholders of AMC Theatres firm? Is there a high degree of employee ownership…

A: A shareholder holds shares in a company. Stockholders possess a portion of the corporation.…

Q: What are governance mcechanisms that help align the incentives of stockhlers and managers  - help…

A: The interest of stockholders and managers are often not aligned. Stockholders are owners of a…

Q: Why should shareholders be the owners of the firm?

A: A shareholder, also known as a stockholder, is a person, company, or institution who owns at least…

Q: friend who knows you study accounting approaches you to discuss share market investment strategies.…

A: Investing in the share market is quite risky and complex so there is need of understanding of market…

Q: Explain how a financial manager can, in practice, maximize the wealth of shareholders.

A: Answer

Q: In developing a compensatory share option plan, a company's objective is to

A: Share option plan represents that the company offers the company the shares in order to reward them…

Q: Do firms need to consider the so-called corporate social responsibilities in making investment…

A: This is a primary responsibility of a Corporate house to returning to society.  Corporate social…

Q: Justify favouring shareholders’ wealth maximisation over profit maximisation as the goal of a firm…

A: Profit maximization refers to maximizing rupee/dollar income of the firm. Shareholders’ wealth…

Q: What does it mean to say that managers should maximize shareholders' wealth "subject to ethical…

A: The main focus of the manager should be maximizing the shareholder’s wealth. More profit indicates…

Q: Stock options are often used to encourage employees to: Focus on company performance. O Take a…

A: Employee Stock Options are a benefit scheme plan to retain the employees for a certain minimum…

Q: What does it mean to say that managers should maximize shareholder wealth "subject to ethical…

A: A company's primary goal is to raise the value of its stocks in order to maximize shareholder…

Q: How does the activity of investors effect the decisions of executives within the firm?

A: There is no direct connection between the activities of investor  in financial markets with the…

Q: wealth maximization

A: Wealth Maximization is the maximization or increasing the value of the company. Increasing the…

Q: How do the shareholders of an organization can encourage its manager to act in a way which is…

A: The primary objective of any organization is to increase shareholders wealth.  Wealth maximization…

Q: Explain how a firm might use stock options in order to incentivise a manager to work in the…

A: Company provide incentives to managers so that they work in interest of shareholders maximization…

Q: What goals might be pursued by managers instead of maximization of shareholder wealth?

A: The shareholder wealth is the company revenue. The shareholder wealth is increased by increasing of…

Q: director’s

A: Introduction: Director's remuneration is nothing but the salary which is paid to the directors of an…

Q: Give an example of how the purpose and objectives of a firm influence how management designs its…

A: Here is the answer:

Q: The firm uses measures from its financial statements to improve shareholder value. What element in…

A: Managers engage in transactions in order to boost the firm's worth. Of fact, the value of a company…

Q: why is it essential for a corporate manager to balance the interests of society and shareholders?

A: Corporate social responsibility or CSR is a type of business model that makes the companies socially…

Q: Explain the links between stock price, intrinsic value, and executive compensation

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: Write a brief description of the logic behind the development of the time value formula for…

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

Q: activity of investor

A: A place where securities and derivatives are dealt with is known as a financial market (FM).

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.