While stock bonuses can be an effective tool for aligning interests and motivating employees

A company's board thinks it needs to reward top management for advancing the company's aims. The board decides on bonuses based on share price rises at the end of each year. Bonuses will be given in shares that managers can keep or sell. What are the ramifications of such a bonus scheme?

Hi Can You answer the questions below please

In a few sentences, answer the following question as completely as you can. Imagine you are the treasurer of a small manufacturing firm. Your firm is planning to go public (i.e., sell stock to investors for the first time). One unresolved question concerns the market’s required return on the stock. Given what you have learned, how do you think the required return will affect the market value of your firm’s stock? How would you go about estimating this rate?

Which of the following actions would be likely to reduce potential conflicts of interest between stockholders and managers?   a. A firm's compensation system is changed so that managers receive larger cash salaries but fewer long-term options to buy stock.     b. The company changes the way executive stock options are handled, with all options vesting after 2 years rather than having 20% of the options awarded vest every 2 years over a 10-year period.     c. The composition of the board of directors is changed from all inside directors to all outside directors, and the directors are compensated with stock rather than cash.     d. The company's outside auditing firm is given a lucrative year-by-year consulting contract with the company.     e. Congress passes a law that severely restricts hostile takeovers.

Which one of the following factors may affect stock return but out of the CEO's control?This chould potentially be a problem when trying up the compensation scheme to stock returns/ A.Supply chain risk management B.Federal monetary policy and regulations C.The rival firm recruits the company's employees D.Tte high inflation rate announced in the last quater

1) "Information asymmetry lies at the heart of the ethical dilemma that managers, stockholders, and bondholders confront when companies initiate management buyouts or swap debt for equity." Comment on this statement. What steps might a board of directors take to ensure that the company's actions are ethical with regard to all parties? 2) Assume that you are the CFO of a company contemplating a stock repurchase next quarter. You know that there are several methods of reducing the current quarterly earnings, which may cause the stock price to fall prior to the announcement of the proposed stock repurchase. What course of action would you recommend to your CEO? If your CEO came to you first and recommended reducing the current quarter's earnings, what would be your response?

A CEO wants to create an ownership culture. The stock is trading at $50 per share. Which approach is best? A. Give every employee 1,000 shares of restricted stock B. Give stock to senior management who can influence profits C. Introduce a cash profit sharing program D. All of the above are equally good ways to create an ownership culture

Why might a company repurchase its own stock? A) It believes that the market undervalues its shares B) To offset dilutive effects of employee stock options granted C) To recognize an economic gain when the treasury shares are later sold for a profit D) To improve earnings per share by reducing the denominator E) All of the above is it just A and B or is it all of the above

(Calculating the ex-dividend stock price) Kingwood Corporation has a stock price of $115.62 per share and is contemplating the payment of a large, one-time cash dividend of $40.39 per share. The underlying motivation for the large payout comes from management's belief that the firm has more cash than it can profitably reinvest and that keeping the cash will adversely affect the incentives of the workforce to strive to create shareholder value. Consequently, the firm's management decided to pay the large cash dividend. What do you think the ex-dividend-date price of the company's shares will be? If the firm's management is right about the stimulating effect of disgorging cash, do you think that the drop in stock price after the ex-dividend date will be smaller than otherwise expected? a. The ex-dividend date price of the company's shares will be $ : (Round to the nearest cent.) b. If the firm's management is right about the stimulating effect of disgorging cash, do you think that the…

50. Help me selecting the right answer. Thank you

A company would repurchase its own stock for all of the following reasons except:a. it wishes to prevent unwanted takeover attempts.b. it wishes to increase the earnings per share.c. it believes the stock is overvalued.d. it needs the stock for employee bonuses.

12. Why might a company repurchase its own stock? A) It believes that the market undervalues its shares B) To offset dilutive effects of employee stock options granted C) To recognize an economic gain when the treasury shares are later sold for a profit D) To improve earnings per share by reducing the denominator E) All of the above

Hello, may you please help me? Thank you.   After learning how to value a stock in his Corporate Finance class, Mark Stark decided to put his knowledge into practice and use the constant growth rate model to value El Tomate Feliz Co. He found that the company was severely undervalued. The stock was trading at $50 per share, but he valued it at $120 per share. Mark complained: “I thought that El Tomate Feliz was a steal and bought as many shares as I could, but the price didn’t go up. I have waited a year, and the price has not changed that much.”   What could have gone wrong with Mark’s valuation? What can Mark do to mitigate pitfalls in valuation?

Historically, technology firms have been the most aggressive users of stock-based compensation   in the form of stock options granted to almost all employees of the firms. What is the rationale for offering stock options as compensations? Why has this form of compensation been particularly popular with technology firms in the past?

If a management team wishes to boost the company's stock price, then it should consider Copyright by Glo-Bus Software, Inc. Copying, distributing, or 3rd party website posting isexpressly prohibited and constitutes copyright violation O boosting the company's dividend by $0.50 or more every year, increasing the company's retained earnings, and paying off all long-term debt as rapidly as possible in order to achieve an A+ credit rating. O paying off all long-term debt as rapidly as possible, keeping the company's dividend payout ratio between 25% and 50%, spending additional money on corporate citizenship and social responsibility, and maintaining a credit rating that is no less than B+. O increasing the company's retained earnings each year, keeping the company's credit rating at A (or above), spending amounts on corporate citizenship and social responsibility that are below the industry average, and issuing sufficient shares of common stock to raise the funds to pay off all long-term…

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(Treasury Stock—Ethics) Lois Kenseth, president of Sycamore Corporation, is concerned about several large stockholders who have been very vocal lately in their criticisms of her leadership. She thinks they might mount a campaign to have her removed as the corporation’s CEO. She decides that buying them out by purchasing their shares could eliminate them as opponents, and she is confident they would accept a “good” offer. Kenseth knows the corporation’s cash position is decent, so it has the cash to complete the transaction. She also knows the purchase of these shares will increase earnings per share, which should make other investors quite happy. (Earnings per share is calculated by dividing net income available for the common shareholders by the weighted-average number of shares outstanding. Therefore, if the number of shares outstanding is decreased by purchasing treasury shares, earnings per share increases.)InstructionsAnswer the following questions.(a) Who are the stakeholders in…

A privately held corporation, is making plans for future investments that can increase growth. The company’s manager has recommended that the company “go public” by issuing common stock to raise the funds needed to support the growth. The current owners, who founded the firm, are worried that control of the firm will be diluted by this strategy. If the company undertakes an IPO, it is estimated that each share of stock will sell for $6.25, the investment banking fee will be 22 percent of the total value of the issue. The founders now hold all of the company’s stock: 8 million shares. If the company issues 8 million shares, what proportion of the stock will the founders own after the IPO?

A privately held corporation, is making plans for future investments that can increase growth. The company’s manager has recommended that the company “go public” by issuing common stock to raise the funds needed to support the growth. The current owners, who founded the firm, are worried that control of the firm will be diluted by this strategy. If the company undertakes an IPO, it is estimated that each share of stock will sell for $6.25, the investment banking fee will be 22 percent of the total value of the issue. If the founders must issue stock to finance the growth of the firm, what would you recommend they do to protect their controlling interest for at least a few years after the IPO?