Reference no: EM133223441
Finance Questions -
1. What are some of the problems involved in implementing the goal of maximization of shareholder wealth?
2. Firms often involve themselves in projects that do not result directly in profits. For example, Apple, which we featured in the chapter introduction, donated $50 million to Stanford University hospitals and another $50 million to the African aid organization (Product) RED, a charity fighting against AIDS, tuberculosis, and malaria. Do these projects contradict the goal of maximization of shareholder wealth? Why or why not?
3. What is the relationship between financial decision making and risk and return? Would all financial managers view risk-return trade-offs similarly?
4. What is the agency problem, and how might it impact the goal of maximization of shareholder wealth?
5. List the key advantages and disadvantages of a (a) sole proprietorship, (b) partnership, and (c) corporation.
6. Identify the primary drawbacks of a corporation.
7. Show the differences between organizational forms using the following criteria: (a) number of owners, (b) liability for firm's debts, (c) change in ownership dissolves the firm, and (d) taxation.