BuyFindarrow_forward

Fundamentals of Financial Manageme...

14th Edition
Eugene F. Brigham + 1 other
ISBN: 9781285867977

Solutions

Chapter
Section
BuyFindarrow_forward

Fundamentals of Financial Manageme...

14th Edition
Eugene F. Brigham + 1 other
ISBN: 9781285867977
Textbook Problem

What are some actions that stockholders can take to ensure that management’s and stockholders’ interests are aligned?

Summary Introduction

To identify: The actions that stockholders can take to ensure that the management and stockholder’s interests are aligned.

Introduction:

Stockholders: Stockholders are the owner of the company who invest funds in the business. Stockholders have the voting right and control over the management. The relationship between the stockholder and manager is like the relationship of principal and agent

Managers: Managers are the agent of the stockholders who perform for the stockholders. The mangers should not do any such action which is detrimental to the interest of the stockholders. There can be a situation where conflicts may arise between manager’s personal interest and stockholders interest, in such situation the priority should be given to the stockholders interest.

Explanation
  • The compensation package of the manager should be attractive which motivate them to perform actively. If the compensation package is good, the manager will focus on the maximization of stockholders value.
  • The stockholders should get an opportunity to see the o...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Why isnt trade among countries like a game with some winners and some losers?

Brief Principles of Macroeconomics (MindTap Course List)

Define the term product

MKTG 12:STUDENT ED.-TEXT

CURRENT ASSETS INVESTMENT POLICY Rentz Corporation is investigating the optimal level of current assets for the...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

When a note is dishonored, the interest is not credited to Interest Revenue because it is not earned.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)