Questions from Managerial Finance

Q: How do market forces—both shareholder activism and the threat of

How do market forces—both shareholder activism and the threat of takeover—prevent or minimize the agency problem? What role do institutional investors play in shareholder activism?

Q: For what three main reasons is profit maximization potentially inconsistent with wealth

For what three main reasons is profit maximization potentially inconsistent with wealth maximization?

Q: How can you determine the size of the equal, end-

How can you determine the size of the equal, end-of-year deposits necessary to accumulate a certain future sum at the end of a specified future period at a given annual interest rate?

Q: Describe the procedure used to amortize a loan into a series of

Describe the procedure used to amortize a loan into a series of equal periodic payments.

Q: What does it mean when we say that individuals as a group

What does it mean when we say that individuals as a group are net suppliers of funds for financial institutions? What do you think the consequences might be for financial markets if individuals consum...

Q: How can you determine the unknown number of periods when you know

How can you determine the unknown number of periods when you know the present and future values—single amount or annuity—and the applicable rate of interest?

Q: Why is it important that managers recognize that a tradeoff exists between

Why is it important that managers recognize that a tradeoff exists between risk and return? Why does that tradeoff exist?

Q: What is the primary economic principle used in managerial finance?

What is the primary economic principle used in managerial finance?

Q: What are the major differences between accounting and finance with respect to

What are the major differences between accounting and finance with respect to emphasis on cash flows and decision making?

Q: If managers do not act in the best interests of shareholders,

If managers do not act in the best interests of shareholders, what role might incentives play in explaining that behavior?