Financial Management: Theory & Practice
16th Edition
ISBN: 9781337909730
Author: Brigham
Publisher: Cengage
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Chapter 13, Problem 4Q
Summary Introduction
To determine: The actions an entrenched management might take that would harm shareholders.
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Why might one expect managers to act in shareholders' interests? Give some reasons.
What are the conflicts between shareholders and managers?
What conflicts of interest can arise between managers and stockholders?
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Financial Management: Theory & Practice
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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
- What do you think is the main issue of conflict between the stockholders and managers?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_forwardhow does the existence market for corporate control affect firm performance?arrow_forward
- How 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_forwardwhy is it essential for a corporate manager to balance the interests of society and shareholders?arrow_forwardWhat business risks does Dell face that may threaten its ability to satisfy shareholder expectationsarrow_forward
- 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_forwardA well-run company should align the management’s interest and with the owner’s interests. What are some actions that stockholders can take to ensure that management’s and stockholders’ interests are aligned? Is this important? What are some of the risks/consequences if the management’s interests are not aligned with the owners?arrow_forwardwhat does it mean to say that managers should maximize shareholders wealth subject to ethical constraints?arrow_forward
- What do you see as some of the possible problems if shareholder value is seen as a strategy (and not an outcome)?arrow_forwardWhich of the following does not help align managerial and shareholder incentives? Question options: a) Market for Corporate Control b) Product Market Competition c) Antitrust Law d) Corporate Law e) Markets for Directorsarrow_forwardManagers of corporations don’t always takeactions that are in the best interest of the corporation’s owners. What are some of those actions, andhow can corporations structure the managementcontract to help control them?arrow_forward
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