What is meant by the term information asymmetry

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Reference no: EM132066460

1. Give three broad types of decisions that a financial manager makes

2. Explain what is meant by the term “information asymmetry”.

3. What main financial objective does the theory of company finance assume that a business organisation has?

4. Explain the concept of economic value added (EVA) .

5. Which of the following are examples of financial objectives that a company might choose to pursue?

(a) Provision of good wages and salaries

(b) Restricting the level of gearing to below a specified target level

(d) Producing environmentally friendly products

6. Calculate the economic value added from the following information:

A company has reported operating profits after tax of N$70 million. The company’s investments amounts to N$600 million and its after tax cost of financing is 9%.

7. Suggest three ways of overcoming the agency problem.

8. Explain why a company may have a positive accounting profit and a negative EVA?

Reference no: EM132066460

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