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2. Explain several dimensions of the shareholder-principal conflict with manager-agents known as the principal-agent problem. To mitigate agency problems between senior executives and shareholders, should the compensation committee of the board devote more to executive salary and bonus (cash compensation) or more to long-term incentives? Why? What role does each type of pay play in motivating managers? 3. Corporate profitability declined by 20 percent from 2008 to 2009. What performance percentage would you use to trigger executive bonuses for that year? Why? What issues would arise with hiring and retaining the best managers? 6. In the context of the shareholder wealth-maximization model of a firm, what is the expected impact of each of the following events on the value of the firm? Explain why. a. New foreign competitors enter the market. b. Strict pollution control requirements are enacted. c. A previously nonunion workforce votes to unionize. d. The rate of inflation increases substantially. e. A major technological breakthrough is achieved by the firm, reducing its costs of production.
1.For each of the determinants of demand in Equation 2.1, identify an example illustrating the effect on the demand for hybrid gasoline-electric vehicles such as the Toyota Prius. Then do the same for each of the determinants of supply in Equation 2.2. In each instance, would equilibrium market price increase or decrease? Consider substitutes such as plug-in hybrids, the Nissan Leaf and Chevy Volt, and complements such as gasoline and lithium ion laptop computer batteries. 5. Two investments have the following expected returns (net present values) and standard deviation of returns: Project Expected Returns Standard Deviation A $50,000 $40,000 B $250,000 $125,000 Which one is riskier? Why? 6. The manager of the aerospace division of General Aeronautics has estimated the price it can charge for providing satellite launch services to commercial firms. Her most optimistic estimate (a price not expected to be exceeded more than 10 percent of the time) is $2 million. Her most pessimistic estimate (a lower price than this one is not expected more than 10 percent of the time) is $1 million. The expected value estimate is $1.5 million. The price distribution is believed to be approximately normal. a. What is the expected price? b. What is the standard deviation of the launch price? c. What is the probability of receiving a price less than $1.2 million?
Describe why a company in a perfectly competitive market would choose to remain in business, if its profit is zero at equilibrium.
The total market rate of common stock of the Okefenokee Real Estate Firm is $6 million, and the total value of its debt is 4 million dollar.
From the second e-Activity, assess the marketing and pricing strategies, for example rebates, to determine the goal(s) of the marketing and pricing strategies for one of the companies you researched
Adriatic Company's stock had a required return of 11.50 percent last year, when the risk-free rate was 5.50% and the market risk premium was 4.75 percent.
BP recently evaluated a proposal for switching to a new system of storage for refined petroleum products. Based on their analysis of the project, the initial investment required for project is 50 million dollar,
Jesse, Corporation, located in Mesa, Arizona, manufactures high-end baby chairs. The company's cost accountant, Lisa, has been assigned through the CEO to determine how many baby chairs Jesse, needs to make and sell in order to break even.
The accompanying table demonstrate a car manufacturer's total cost of manufacturing cars. Calculate manufacturer fixed cost
You were recently hired to replace the manager of the Roller Division a t a major conveyor-manufacturing firm, despite the manager's strong external sales record. Roller manufacturing is relatively simple, requiring only labor
When there are economies of scope in two products which are separately produced by two companies, merging into a single firm can
Price comparison services on the Internet are a popular way for retailers to promote their products and a convenient way for customers to simultaneously obtain price quotes from many firms setting I identical product.
Suppose you are the manager of a company that produces products X and Y at zero cost. You know that different types of consumers value your two products differently,
Using the data in the following table, Complete the last two columns by replacing the * with the correct values and create the following curves in one chart.
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