Societies attempt to keep private interests in line by legislating against behavior that might create social costs (such as polluting the water). If the legislation is comprehensive enough, does the problem of social costs cease to exist? Why or why not?
Answer to relevant QuestionsOne of the arguments made for having legislation restricting hostile takeovers is that unscrupulous speculators may take over well-run firms and destroy them for personal gain. Allowing for the possibility that this could ...Antitakeover amendments can be in the best interests of stockholders. Under what conditions is this likely to be true? The following table lists returns on the market portfolio and on Microsoft, each year from 1989 to 1998. a. Estimate the covariance in returns between Microsoft and the market portfolio. b. Estimate the variances in returns ...Assume that you have half of your money invested in Times Mirror, the media company, and the other half invested in Unilever, the consumer product giant. The expected returns and standard deviations on the two investments ...Time Warner, the entertainment conglomerate, has a beta of 1.61. Part of the reason for the high beta is the debt left over from the leveraged buyout of Time by Warner in 1989, which amounted to $10 billion in 1995. The ...
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