Answers to these problems/questions in this attach file .
Several dimensions of the shareholder – principal conflict with manager agents known as the principal agent problem. To mitigate agency problems, between senior executives and shareholders, should the compensation committee of the board toward more to exit the salary and bonus (cash compensation) or more to long-term incentives? Why? What role does each type of pay play in motivating managers?
- Corporate profitability declined by 20% from 2008 two 2009 what performance percentage would you use to trigger executive was is for that year? Why? What issues would arise with hiring and retaining the best managers?
- In the contents of the shareholder wealth maximization model of a firm, what is the expected impact of each of the following events on the value of the firm? Explain why
- new foreign competitors enter the marketplace
- strict pollution control requirements are enacted
- a previously nonunion workforce boards to unionize
- rate of inflation increases
- major technological breakthrough
Two investments have the following expected returns (net present values) and standard deviation of returns:
PROJECTEXPECTED RETURNSSTANDARD DEVIATION
A$ 50,000$ 40,000
Which one is riskier? Why?
The manager of the aerospace division of General Aeronautics has estimated the price it can charge for providing satellite launch services to commercial firms. Her most optimistic estimate (a price not expected to be exceeded more than 10 percent of the time) is $2 million. Her most pessimistic estimate (a lower price than this one is not expected more than 10 percent of the time) is $1 million. The expected value estimate is $1.5 million. The price distribution is believed to be approximately normal.
a. What is the expected price?
b. What is the standard deviation of the launch price?
c. What is the probability of receiving a price less than $1.2 million?
– Chapter 1: Problems 2, 3, and
Chapter 2: Problems 1, 5, and 6.
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