CFIN -STUDENT EDITION-ACCESS >CUSTOM<
6th Edition
ISBN: 9780357752951
Author: BESLEY
Publisher: CENGAGE C
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Chapter 1, Problem 15PROB
Summary Introduction
Ethics can be defined as moral philosophy or credo that differentiates right conduct from wrong.
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Explain the links between stock price, intrinsic value, and executive compensation
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Select one:
A.
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B.
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Wealth Maximization
Chapter 1 Solutions
CFIN -STUDENT EDITION-ACCESS >CUSTOM<
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- Is business ethics an oxymoron?arrow_forwardConsider again Milton Friedman’s article. 1. What does Friedman mean by “ethical custom”? 2. If the laws of the society are limiting the company’s profitability, would the company be within its rights to disobey the law? 3. What if the law is “on the books,” but the company could count on a lack of enforcement from state officials who were overworked and underpaid? Should the company limit its profits? Suppose that it could save money by discharging a pollutant into a nearby river, adversely affecting fish and, potentially, drinking water supplies for downstream municipalities. In polluting against laws that aren’t enforced, is it still acting “within the rules of the game”? What if almost all other companies in the industry were saving money by doing similar acts?arrow_forwardWhy is ethical behavior important to business?arrow_forward
- Ethical Considerations. Are poison-pill defenses ethical? If a potential acquirer buys company stock legally,thereby becoming a part owner of the company, shouldmanagement be allowed to entrench itself against thewishes of this owner? Explain your answer.arrow_forwardWhy do accountants have to be ethical in their duties and responsibilities?arrow_forwardWhat is the possible agency conflict between inside owner/managers and outside shareholders? What are some possible agency conflicts between borrowers and lenders? How is it possible for an employee stock option to be valuable even if the firm’s stock price fails to meet shareholders’ expectations?arrow_forward
- Why are ethics and trust important in business?arrow_forwardUnethical acts are generally committed by unethical people. What are some things companies can do to help ensure that their employees act ethically?arrow_forwardAfter dissolution caused by the illegal acts, fraud, corruption and etc. of the directors, trustees, officers, or employees, what will happen to the innocent stockholders and employees? Are they going to receive something from the company's assets since they are not involved to that act?arrow_forward
- 1. How is hiring the “next generation” of Chinese elites different from practices here in North America. Is it the same as Clinton’s daughter securing a job at a hedge fund company? 2. What are some of the moral principles involves here and what are some of the consequences of this practice? How does any company stay competitive if others choose to conduct unethical business practices?arrow_forwardIf you are in financial hardship, explain what it means. If we suppose that financial hardship occurs, explain how and why financial distress would make a company's stock more hazardous.arrow_forwardBusiness Ethics and Corporate Social Responsibility: Do businesses have a responsibility to society or to their shareholders? Explain your answer. Do these responsibilities conflict or work together? How do social and profit responsibility relate to CSR?arrow_forward
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