Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- What is the implication of managerial entrenchment: should company favor debt or equity? Why?
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- How do you define working capital? What may happen if an organization neglected to manage its working capital? What techniques do you recommend for your organization? Why?arrow_forwardAgency theory suggests that one way to motivate managers to act in the best interests of the owners/shareholders is to link managerial compensation to firms' payoffs, such as net income or share returns. However, such a linkage imposes risk on the manager. Required: (1) Why is it important to control or reduce some of the risk thus imposed on managers? Explain. Discuss two methods by which risk imposed on the managers could be reduced.arrow_forwardHow can you tell of a company is profitable?arrow_forward
- how do compensation plans, including bonus structures, drive behavior? How can transfer pricing, for example, lead to outcomes that are not in the best interests of the organization? What do you think about executive bonuses tied to stock prices in a public company? What other issues can you see with compensation plans?arrow_forwardHow do the managers estimate the opportunity cost of capital for a company?arrow_forwardIf a firm's expenses equal or exceed its revenue, what actions might management take?arrow_forward
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