Finance

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Chapter 1: 1-2) Would the role of the financial manager be likely to increase or decrease in importance relative to other executives if the rate of inflation increased? Explain. During times of increasing inflation, the role of a financial manager is likely to increase mostly due to the broad areas of expertise a financial manager is capable of handling. Even in other areas of business such as management, marketing, accounting, information systems and economics, financial managers are able to provide guidance during times of inflation. Financial managers are well-equipped to manage the cash flow of an organization and may even be able to create forecast models that assist with identifying new opportunities to invest. 1-4) In general…show more content…
What are some actions stockholders can take to ensure that management’s interests and those of stockholders coincided? What are some other factors that might influence management’s actions? If I were president, I would make decisions for the betterment of the organization and its stockholders. The main reason behind this decision is that if the organization is healthy and accomplishing its goals, then I will benefit from its operations naturally. A stockholder of an organization represents a part owner of the company and as such, has the right to partake in voting during major decisions. This is one way stockholders hold top executives accountable and keep their interests in place. An additional method includes organizations such as the Laborers International Union of North America that monitor top executives to “ensure that managers pursue the goal of wealth maximization. When it is determined that action is needed to “realign” management decisions with the interests of investors, these institutional investors exercise their influence by suggesting possible remedies to management” (p18). 1-11) What is corporate governance? Does a firm’s corporate governance policy relate to whether it conducts business in an ethical manner? Explain. Corporate governance is typically the guidelines that an organization follows when it conducts business. It often relies heavily on clear standards and goals that the managers of the organization can follow and pursue with little

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