Answers: Financial Management

Identify two ways in which a shareholder can realize a return on a share investment. Describe the relationship between them.

Managers and shareholders are the utmost contributors of these conflicts, hence affecting the entire structural organization of a company, its managerial system and eventually to the company's societal responsibility. A corporation is well organized with stipulated division of responsibilities among the arms of the organizational structure, shareholders, directors, managers and corporate officers. However, conflicts between managers in most firms and shareholders have brought about agency problems. Shares and their trade have seen many companies rise to big investments. Shareholders keep the companies running

A. Firms with lower effective tax rates were found to have a higher proportion of leased debt to total assets than did firms with higher effective tax rates. Some lease agreements are in-substance long-term installment purchases of assets that have been structured to gain tax or other benefits to the parties. Since leases may take different forms, it is necessary to examine the underlying nature of the original transaction to determine the appropriate method of accounting for these agreements. That is, they should be reported in a manner that describes the intent of the lessor and lessee rather than the form of the agreement.

(a) Suppose an investor has an $8 million investment in the stock of firm A. What alternative $8 million

Conversely, insufficient capacity or inefficient computing resources can stunt growth. The company that waits until it can afford to purchase the right hardware and software may find itself unable to remain competitive. Moreover, although businesses would rather keep their credit lines open for unforeseen events, they must sometimes act quickly to adopt economically attractive new technology. Before we examine the attributes which make leasing attractive to so many companies we need to review two most common types of leasing arrangements.

1. Why do firms pay dividends? What, in general, are the advantages and disadvantages of paying cash

As in AASB 117’s definition, a finance lease is a lease that effectively transfer substantially all of the risk and benefits incidental to the ownership of the leased item that are capitalised at the present value of the minimum lease payments under the lease and are disclosed as an asset or investment property.

Off balance sheet financing, for instance, operating and synthetic leases, not only overstates corporate earnings and perjures their financial positions, it also allows them to preserve the ratios needed to assure debt contracts. This decreases the authority of such contracts, because the companies are not in reality keeping their debt ratios low; they're lying about the amount of debt they actually have (Edman, 2011).

Being a stockholder can have great rewards like a viable source of income, or an eggs nest for retirement, however it does have its downsides as well. Owning stock in a corporation bears the risk of losing all one’s investment if the company goes bankrupt. Aside from financial benefits, owning stock allows stockholders to have a voice (however small it may be) in the company’s direction.

3) A business should be managed ethically to do the right thing for all stakeholders.

First, as the lease is non-cancellable and at the inception of the lease the present value of the minimum lease payments amounts to at least substantially all of the fair value of the leased asset (calculations provided below), the lease is a finance lease.

firm’s financing, for example, issuing or repurchasing stock and borrowing or repaying loans. It also

Shareholders of the company have ultimate control of the company. They can appoint and remove directors who run the business and are also responsible for its management of the company.

Until recently, the Roanoke branch of Virginia represented Phoenix Advertising vision to exceed and excel in customers satisfaction and the unparalleled leader of value-added support services

“Corporate finance theory, teaching and the typically recommended practice at least in the US are all built on the premise that the primary goal of a corporation should be the maximization of shareholder value.”