Case Problem 1: Answer Questions 1,3,4,7 and 12 in the text on pages 17-18 (10th edition). Submit via this link, and please be sure to include your name on your work. Length should be appx two pages, single-spaced.
Q1. What are the three types of financial management decisions ? For each type, give an example of a business transaction that would be relevant.
Q3. What is the primary disadvantage of the corporate form of organization ? Describe at least two advantages of the corporate organization.
Q4. In response to the Sarbanes-Oxley Act, many small firms have opted to “go dark” and to delist their stock. Why might a company choose this route ? What are the costs of going dark ?
Q7. Who owns a corporation ? Describe the process by which the owners control the firm’s management. What is the main reason that an agency relationship exists in the corporate form of organization ? In this context, what kinds of problems can arise ?
Q12. Can the goal of maximizing the value of the company’s stock conflict with other goals, such as avoiding unethical or illegal behavior ? In particular, do you think subjects like customer and employee safety, the environment, and the general good of society fit into this framework, or are they ignored ? Cite some specific examples to illustrate your answer.
