Question

In: Finance

1.As an advanced management student with an emphasis on corporate finance, you want to apply your...

1.As an advanced management student with an emphasis on corporate finance, you want to apply your acquired knowledge to improve your personal credit history. Present at least three examples from corporate governance that would assist in this goal. Do not forget to be an academic critic, that is, avoid personal opinions without a theoretical basis.

Solutions

Expert Solution

Three examples from corporate governance that will help me in my goal of improving my personal credit history are:

  • Accountability – This principle of corporate governance is based on the corporate finance theory of risk management. I will ensure to borrow only when required and once I start borrowing in a reasonable manner and cut down on my unnecessary expenses and borrowings it will start reflecting positively on my personal credit history and my credit score as well.
  • Stewardship - This principle of corporate governance is based on financial theory of fiduciary responsibility. I have the ethical obligation to act in a manner that will ensure financial stability for me. Just like in a company managers are fiduciary responsible for investments made by stockholders I will be fiduciary responsible for my own money. Hence by better taking care of my assets and expenses I will be able to improve my credit history and score as well.
  • Measurement – This aspect will focus on constant evaluation of my finances. By setting tangible and measurable financial goals for myself I will be better able to manage my earnings and balance it with my expenses. Budgeting will be a good tool that I can use here.

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