Submit your responses to these questions in the Chapter 13 Question responses in the Assignment folder on BEFORE CLASS.

Chapter 13 questions- CORPORATE GOVERNANCE

TEXTBOOK: Financial Management: Theory & Practice

1. Why are there agency conflicts within a company?

2. Describe the conflict between stockholders and creditors. How can creditors protect themselves?

3. Describe the conflict between shareholders and managers. What can firms do to reduce the conflict?

4. What is entrenched management? Is this good for the shareholders? Why or why not? What corporate charter provisions allow entrenched management to continue?

5. How can a companys board of directors help mitigate the agency conflict?

6. How can debt be used to discipline managers? How can debt cause an underinvestment problem?