Identify the differences that might exist between the objectives of the company’s manager with the board...

Identify the differences that might exist between the objectives of the company’s manager
with the board of directors or shareholders.

Solutions

Expert Solution

There are various difference of objectives of a company's director and shareholders and that can better be reflected through agency conflicts.

A. Shareholders are are inclined towards maximization of the value of the overall firm, whereas directors always want to report higher profits.

B.shareholders are inclined for capital appreciation in the long run whereas directors would be looking for profit maximization in the short run because that would help them secure their job

C. Shareholders would want the company to take less risk and constantly maximize its profit but the directors will always want to maximize the profit of the company through undertaking of risky projects.

D. directors will always be wanting a higher remuneration for their services to the company whereas the shareholders will always want a lower remuneration to directors because it would help them to cut the cost of the overall company.

E. Shareholders will always be wanting to get a higher amount of dividend where as director will always be wanting to reinvest the profits back into the business, as it will help in profit maximization

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Why might differences exist between the amount of property tax revenues recorded for the current year...

Why might differences exist between the amount of property tax revenues recorded for the current year by governmental funds and the amount of property tax revenues recorded for the current year for governmental activities in a given year?

Address the following, which cover the main objectives for this module: Summarize the differences that exist,...

Address the following, which cover the main objectives for this module: Summarize the differences that exist, if any, between the US GAAP and IFRS on the accounting for derivatives designated as hedges at the current date you are answering this question. Prepare an example of a U.S.-based firm managing an exposed foreign currency net liability position including the journal entries required from the date the U.S. firm purchases goods on account from a foreign-based supplier until the date the purchase...

Identify the most important differences between a merger and a strategic alliance. In what circumstances might...

Identify the most important differences between a merger and a strategic alliance. In what circumstances might an alliance be preferred to a merger?

Why does LDH exist as a tetramer? What differences exist between LDHA and LDHB at the...

Why does LDH exist as a tetramer? What differences exist between LDHA and LDHB at the dimer interface? What would happen if LDH were monomeric?

i) Discuss the differences that exist between the three types of service entities.

1. Identify any strategic groups that might exist in the industry. How does the intensity of...

1. Identify any strategic groups that might exist in the industry. How does the intensity of competi- tion differ across the strategic groups you have identified? My company is Pepsi Co 2.How dynamic is the industry in which your com- pany is based? Is there evidence that industry structure is reshaping competition, or has done so in the recent past? My COMPANY IS PEPSI CO.

Question