Which is better a centralized or decentralized approach

Assignment Help Finance Basics
Reference no: EM13260381

Both Berkley and Oakley are large public corporations with subsidiaries throughout the world. Berkley uses a centralized approach and makes most of the decisions for its subsidiaries. Oakley uses a decentralized approach and its subsidiaries make many of their own decisions.

a. Would the agency problem be more pronounced for Berkley or for Oakley? Explain.

b. Would agency costs likely be higher for Berkley or Oakley? Why?

c. Discuss a major advantage and a major disadvantage to a centralized approach such as Berkley uses.

d. Discuss a major advantage and a major disadvantage to a centralized approach such as Oakley uses.

e. Which is better, a centralized or decentralized approach? Explain.

Reference no: EM13260381

Questions Cloud

Explain the calculation the change in enthalpy of hcl : Calculate the change in enthalpy of HCl + NaOH--> NaCl + H2O for this reaction using Hess's Law. Units should be kJ/mol.
Calculate the coupon interest rate : Identify 2 or 3 advantages to the investor of buying a bond with warrants instead of straight bonds.
Find the radius of the star rigel : Find the radius R of the star Rigel, the bright blue star in the constellation Orion, which radiates energy at a rate of 2.7×1032 W
A normally distributed quality characteristcs : A normally distributed quality characteristcs has specification limits at LSL=50 and USL=60. a random sample of size 35 results in Xbar = 55.5 and s= 0.9
Which is better a centralized or decentralized approach : Both Berkley and Oakley are large public corporations with subsidiaries throughout the world. Berkley uses a centralized approach and makes most of the decisions for its subsidiaries. Oakley uses a decentralized approach and its subsidiaries make ..
Explain henderson-hasselbalch equation to calculate the ph : Use the Henderson-Hasselbalch equation to calculate the PH of each solution- a solution that contains 0.760% C5H5N by mass and 0.960% C5H5NHCl by mass
Create a table for the npv profile for this project : Create a table for the NPV profile for this project for discount rates ranging from 0% to 30%, in intervals of 5%. For which discount rates is the project attractive?
What is the current share price : The company will pay a $12 per share dividend in 10 years and will increase the dividend by 5 percent per year thereafter. If the required return on this stock is 13.5 percent, what is the current share price?
Explain the calculation the ph of each of the solutions : Solve an equilibrium problem (using an ICE table) to calculate the pH of each of the following solutions. 0.17 M CH3NH2Cl

Reviews

Write a Review

Finance Basics Questions & Answers

  How will this affect the feasibility of the project

If their expectations about the peso's value are correct, how will this affect the feasibility of the project? Explain.

  Computation of yield from investment

Computation of yield from investment thus it is therefore well known that profits may be slim nowadays

  Expected rate of return

Starlight, corporation must choose between two asset purchases. The yearly rate of return and related probabilities given below summarize the firm's analysis.

  Project cash flow-addition of product

All of the following are anticipated effects of the proposed project. Which of these must be included in initial project cash flow related to net working capital?

  Explain capital budgeting involves calculation present value

Explain Capital budgeting involves calculation of net present value and is considering the development of one of two mutually exclusive new computer models

  Show the taxable income of otter

Show the impact of this information on the taxable income of Otter, Ellie, and Linda if Otter is

  Calculate profit margin

Following is the financial information for Dell Corporation and calculate profit margin.

  Calculate future value of the investment

A grandmother want a plan to finance her new grandchild's college education. She has $62,000 to invest. Search the internet & locate a long-range investment CD, Savings Bond, plan, etc, for the grandmother.

  Find the value of tax shield

Your company has debt worth $200,000, with a yield of 9%, and equity worth $300,000. It is growing at a 5% rate, and its tax rate is 40%. A similar firm with no debt has a cost of equity of 12 percent.

  What will be the new prices of the two bonds

Suppose the maturities of the two bonds are extended to 10 years. What will be the prices of the two bonds given a required yield of 8 percent?

  Swap driven financing the defining features of interest

Describe why corporations engage in swap-driven financing, and describe the defining features of an interest rate and currency swap. Why may a corporation prefer one kind of swap contract over another?

  Planning a bond issue in six months and kenny

The town of South Park is planning a bond issue in six months and Kenny

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd