Explain how a firm might use stock options in order to incentivize a manager to work in the shareholders’ best interests.

Q: What kind of option can be used to incentive CEOs? Discuss the difference between stock option…

A: CEO play and major role in achieving the goal of company and help the company and achieve its…

Q: What do you think is the main issue of conflict between the stockholders and managers?

A: There are various conflicts of interest that can impact manager's decisions to act in shareholders'…

Q: why is the difference between a stock's current market price and its intrinsic value important to a…

A: Stock's current market price: The current stock price of a company is a price that an investor is…

Q: how a firm might use stock options in order to incentivise a manager to work in the shareholders’…

A: Stock Options: These are incentives provided by the company for its employees to stay more…

Q: Within the context of services provided by a stockbroker, discuss the two main types of stockbrokers…

A: Stockbroker:   A stockbroker is an authorized and directed money related firm that encourages…

Q: If a firm could maximize either its current market price or its intrinsic value, whatwould…

A: Answer: Managers should focus on maximizing the intrinsic value. The intrinsic value increases…

Q: How is it possible for an employee stock option to be valuable even if the firm’s stock price fails…

A: Employee stock option is an instrument granted to the employees of the company (mostly to the…

Q: How can an entrepreneur maximize their investment in the financial section of their company plan

A: Entrepreneur maximize their investment in the financial section of their company plan will be…

Q: What are some actions an entrenched management might take that would harm shareholders?

A: Entrenched management basically means that the senior management has grown so powerful that they can…

Q: Corporate managers sometimes use dividends as a tool for communicating with the market. Discuss.

A: Dividend: It is revenue which is distributed by the company to his shareholder. When a company is…

Q: What goals might be persued by managers instead of maximization of shareholders wealth

A: Goals of financial management should be so articulated as to help achieve the objective of wealth…

Q: Why might one expect managers to act in shareholders' interests? Give some reasons.

A: Managers would act in shareholders’ interests as a result of they need a duty to act in their…

Q: Discuss how changes in a firm’s operations might lead to changes in the required rate of return on…

A:

Q: What is the possible agency conflict between inside owner/managers and outside shareholders? What…

A: What is the possible agency conflict between inside owner/managers and outside shareholders?…

Q: What are some actions stockholders can take to ensure that management’s interests and the interests…

A: Some actions that stockholders can take to guarantee that interests of stockholders and management…

Q: The stockholders’ claim in a levered firm can beviewed as a call option; stockholders have the…

A: Stockholder: An individual or group holding the equity stock of the company is called the…

Q: What are governance mcechanisms that help align the incentives of stockhlers and managers  - help…

A: The interest of stockholders and managers are often not aligned. Stockholders are owners of a…

Q: You want to evaluate the stock of a company. Answer the following questions to guide your analysis…

A: The stock analysis refers to the analysis of the return and risk of the stocks and the portfolio.…

Q: A good way to align the incentives of a CEO with those of shareholders is to make his pay directly…

A: A company's Earning per share is defined as the earnings available to shareholders divided by the…

Q: Why should shareholders be the owners of the firm?

A: A shareholder, also known as a stockholder, is a person, company, or institution who owns at least…

Q: In developing a compensatory share option plan, a company's objective is to

A: Share option plan represents that the company offers the company the shares in order to reward them…

Q: Do firms need to consider the so-called corporate social responsibilities in making investment…

A: This is a primary responsibility of a Corporate house to returning to society.  Corporate social…

Q: Justify favouring shareholders’ wealth maximisation over profit maximisation as the goal of a firm…

A: Profit maximization refers to maximizing rupee/dollar income of the firm. Shareholders’ wealth…

Q: What does it mean to say that managers should maximize shareholders' wealth "subject to ethical…

A: The main focus of the manager should be maximizing the shareholder’s wealth. More profit indicates…

Q: How does the use of financial leverage affect stockholders’ control position?

A: SOLUTION:- By raising capital through debt, the owners maintain control of the firm with limited…

Q: Stock options are often used to encourage employees to: Focus on company performance. O Take a…

A: Employee Stock Options are a benefit scheme plan to retain the employees for a certain minimum…

Q: What are some actions that stockholders can take to ensure that management’s and stockholders’…

A: Shareholders own the company but they don’t manage it. Hence, they elect Board of Directors…

Q: Suppose you have shares in a company that is listed on a stock exchange and you are considering…

A: Selling shares of a company is a vital decision which should be taken with utmost care and in…

Q: How do the shareholders of an organization can encourage its manager to act in a way which is…

A: The primary objective of any organization is to increase shareholders wealth.  Wealth maximization…

Q: Explain how a firm might use stock options in order to incentivise a manager to work in the…

A: Company provide incentives to managers so that they work in interest of shareholders maximization…

Q: What goals might be pursued by managers instead of maximization of shareholder wealth?

A: The shareholder wealth is the company revenue. The shareholder wealth is increased by increasing of…

Q: Why shareholders demand that directors and top management should own significant amount of stocks?

A: Stock is the total amount of money hold by any company that is generated through selling shared in…

Q: dividend approach to equity valuation is used to determine a firm or a firms stock valua and the…

A: Affordable dividend approach : Th affordable dividend approach is the most common approach in modern…

Q: How is it possible for an employee stock option to be valuable even if the firm’s stock price fails…

A: employee stock options is a type of equity compensation to their employees like options and…

Q: director’s

A: Introduction: Director's remuneration is nothing but the salary which is paid to the directors of an…

Q: Give an example of how the purpose and objectives of a firm influence how management designs its…

A: Here is the answer:

Q: Explain the links between stock price, intrinsic value, and executive compensation

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: Write a brief description of the logic behind the development of the time value formula for…

A: Since you have asked multiple questions, we will solve the first question for you. If youwant any…

Corporate Ethics

Ethics refers to the moral values and principles that guide an individual. Corporate ethics refers to the moral behavior of a company and its employees while conducting business. Business ethics is another name for corporate ethics. Business ethics reflects the purpose of doing the business. Business ethics is the distinction between what is right and wrong in the workplace and the selection of the right set of actions. Every corporate entity follows business ethics to a large extent in order to survive and compete successfully in the market. Corporate entities that strictly adhere to business ethics gain the trust of their stakeholders and thus gain more customers. An organization follows compliance, i.e., following certain business policies, rules, procedures, and practices to deal with the problem arising from the business environment. Business ethics also ensures that they meet compliance requirements as it was connected with the activities of an organization.