1. What are some of the problems involved in implementing the goal of maximizing shareholder wealth?

2. Using the following criteria, specify the legal form of business that is favored to achieve the listed objective.

a. Low organizational requirements and costs

b. Minimum liability of the owners

c. Easiest continuity of the business

d. Challenging transferability of ownership

e. Easiest management control and regulations

f. Ease and ability to raise capital

g. The best situation for income taxes

3. Firms often involve themselves in projects that do not result directly in profits. For example, Apple donated $50 million to Stanford University hospitals and another $50 million to the African aid organization, a charity fighting against aids. Do these projects contradict the goal of maximization of shareholder wealth? Why or why not?

4. What is the relationship between financial decision making and risk and return? Would all financial managers view risk-return trade offs similarly?