Managers should not focus on the current stock value because doing so will lead to an overemphasis on short-term profits at the expense of long-term profits.
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Managers should not focus on the current stock value because doing so will lead to an overemphasis on short-term profits at the expense of long-term profits.
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- If a business firm has assets worth $170,000 and liabilities that total $40,000, what is the value of the owners’ equity?The managers spent the company's money to accomplish social goals, such as charity events, endowments, etc. without the approval of the investors. Therefore, in stockholder theory, this is unethical. TRUE OR FALSE?Explain how you would use the Balance Sheet of Synlait and A2 Milk if you were thinking of buying shares in either or both companies.
- Your family runs a business, Feline Seafood Treats, which has been manufacturing high-quality fish products and dried feline foods in Richmond, British Columbia since 1984. With the recent retirement of your father, you have been appointed as CEO and while you worked in the business, it was only for a few years while you attended university for your BBA degree. Within weeks of assuming the lead role, you decide that the increased competitive pressure in the industry necessitates a complete restructuring. Presently, your 180 line workers are unionized and they are worried about job losses and your lack of business experience. You are now tasked with preparing a 1-2 page brief to stakeholders on your decisions. The provincial government, due to a recent loan, presently maintains an equity stake of approximately 15% of the company’s shares, which complicates things because you need their approval to make any substantial changes to the structure or job cuts. The brief outlines what…Cash cows are low growth, high market share products. True or false?Describe three elements that can cause uncertainty within an enterprise's cash budget and provide your rationale for including each element. If you were the CFO of a company, what techniques would you use to cope with this uncertainty? How might your coping strategies differ when managing a large company (1,000+ employees) versus a significantly smaller company (100+ employees)?
- True or False. According to Charlie Munger, the profitability in the reinsurance industry is depressed by the fact that many companies believe it to be an attractive business.common stock has a beta of 1. if the risk free rate is 4.71 percent and the expexted return on the market is 12.39 percent what is the companys cost of equity capital.You have just received a business valuation report that is dated six months ago. Describe the factors that might have changed during the past six months and, therefore, caused the value of the business today to be different from the value six months ago. Which of these changes affect the expected cash flows, and which affect the discount rate that you would use in a discounted cash flow valuation of this company?
- To attract, satisfy, and retain the better customers during the upcoming year, a business would need: Cash The desire to make the employees happy because happy employees make the customers happy A good capital structure Satisfied stockholdersIn comparison to investing and financing activities, it is often said that cash from operating activities must be the main source of cash to achieve long term success of the company. Do you agree or disagree with this statement? In your own words, give reason or reasons to support your answer taking into consideration the possible consequences of the cash being provided by any of the other two activities over the long run.If you had $1,000 to invest in a firm, would you invest it in the stock of netflix? Why or why not?