Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN: 9781337395083
Author: Eugene F. Brigham, Phillip R. Daves
Publisher: Cengage Learning
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- What are some of the conflicts that can arise when a company is owned by group of shareholders but managed by a different group of people? How could you reduce the significance of these conflicts?arrow_forwardEvaluate the similarities and differences between trusts and corporations. In an attempt to protect income, which would be most suitable for a company?arrow_forwardWhat options does a group of people have when forming a business? Why might a partnership not be the best form of business organization? What other options might they have?arrow_forward
- What are agency problems, and why do they exist within a corporation? Discuss how agency conflicts affect the goal of maximizing shareholder value.arrow_forwardCompare the potential for agency problems in sole proprietorships, partnerships, and corporations. In light of your analysis, why is the corporate form of organizations so popular?arrow_forwardAre poison-pill defenses ethical? If a potential acquirer buys company stock legally, thereby becoming a part owner of the company, should management be allowed to entrench itself against the wishes of this owner? Explain your answer.arrow_forward
- What is a disadvantage of the corporate form? Profit O Revenue Owners have very little influence on business decisions O Limited liabilityarrow_forwardWhat does it mean for a company to be a legal person and what does it mean for owners of a company to have limited liability? Use an example to compare the liability of owners of two companies, one with limited liability and one without limited liability.arrow_forwardHow does a hostile takeover affect the company’s stakeholder (shareholders, executives, employees, and society in general)? Is it usually beneficial or detrimental to these stakeholders? Why?arrow_forward
- Which one of the following is the least likely reason a company may acquire an ownership interest in another company? Select one: a.To benefit form an overvaluing of assets in the investee company b. To oust an inefficient management team c. To take advantage of operating and/or cost synergies d. To exercise an active role in the business' activitiesarrow_forwardEthical Considerations. Are poison-pill defenses ethical? If a potential acquirer buys company stock legally,thereby becoming a part owner of the company, shouldmanagement be allowed to entrench itself against thewishes of this owner? Explain your answer.arrow_forwardPne disadvantage of forming a corporation rather than a partnership is that this makes it more difficult for the firm's investors to transfer their ownership interests. a. True Ob. Falsearrow_forward
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