Question

In a corporation, what group has the ultimate responsibility for protecting and managing the stockholders interest?

What document is necessary to form a corporation?

Why are institutional investors important in today's business world?

Why is profit maximization, by itself, an inappropriate goal? what is meant by the goal of maximization of shareholder wealth?

In terms of the life of the securities offered, what is the difference between money and capital market?

What is the difference between a primary and secondary market?

What changes can take place under restructuring? In recent time, what group of investors has often forced restructuring to take place?

Answer 1

1-	board of directors	they are responsible to protect the interest of invesors
2-	article of incorporation	this document is mandatory to form an organization. Also known as corporate charter
3-	Thes institutions are the pension fund and mutual funds owning large share in many organization and more of ownership in the companies so can better represent the individual workers and Investors by keeping a check on working of the organization
4-	profit maximization concept does not take into account the timing of profit, risk element and measurement of profit. Wealth maximization aims at to maximize the value of Investor wealth by increasing the share value.
5-	money market fulfills the short term funds requirement while capital market fulfills the long term fund requirement of companies
6-	primary market is a market where fresh issue of securities are offered while in secondary market, issude securities are traded
7-	changes that take place under restructuring are (1) change in capital structure (2) change in voting power and membership proportion (3) composition of assets and liabilities etc. Major or key investors like venture capitalist force to restructuring