1. AGENCY PROBLEMS

Who owns a corporation? Describe the process whereby the owners control the firm's management. Describe the main reason why an agency relationship exists in the corporate form of organization. In this context, describe the types of problems that can arise.

2. ENTERPRISE VALUE

A firm's enterprise value is equal to the market value of its debt and equity, less the firm's holdings of cash and cash equivalents. This figure is particularly of interest to potential purchasers of the firm. Why?

3. CURRENT RATIO

Explain what it means for a firm to have a current ratio of .50. Would the firm be better off with a current ratio of 1.50? What if it were 15.0? Explain your answers.

4. PEER GROUP ANALYSIS

As a financial manager, how might you use the results of peer group analysis to evaluate the performance of your firm? How is a peer group different from an aspirant group?

Answer rating: 100% (QA)

1 Agency Problems Ownership of a corporation is typically represented by shareholders who elect a board of directors to oversee management Shareholder... View the full answer