You bought 1,000 shares of Altona Ltd 5 years ago. Over the years you have attended...

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You bought 1,000 shares of Altona Ltd 5 years ago. Over the years you have attended the annual general meetings and carefully read through Altona Ltd's financial statements. While you have been generally satisfied with the amount of annual dividends, recently you have become a little concerned with declining share prices. You became particularly alarmed when media published several photos showing Altona management's Hawaiian management retreats. Taking into consideration the management behaviour critically discuss the relationship between a corporation's shareholders and management. Analyse the problems and costs related to this relationship and explain with example how a company may structure management compensation to mitigate such costs. Case Study 2 Clara bought a house three years ago that cost $750,000. She had 20% deposit and borrowed the rest from Tardis Bank at a rate of 7.2% p.a., compounded monthly, for 10 years. Tardis Bank has now notified Clara that after the last monthly payment for the third year, the interest rate on her loan will increase to 9.6% p.a., compounded monthly, in line with market rates. Also from the fourth year of her loan Clara can either increase the monthly repayment (so as to pay off the loan by the originally agreed date), or she can keep paying the same original monthly repayment and extend the term of the loan. a. Calculate the new monthly repayment if Clara wants to pay off the loan by the originally agreed date. (Show all calculations, show answers correct to two decimal places.) b. Calculate the extra period added to the term of the loan, if Clara keeps on paying the original monthly repayment. (Show all calculations, show final answer correct to whole number.) (Show all calculations and show answers correct to the nearer cent.) You bought 1,000 shares of Altona Ltd 5 years ago. Over the years you have attended the annual general meetings and carefully read through Altona Ltd's financial statements. While you have been generally satisfied with the amount of annual dividends, recently you have become a little concerned with declining share prices. You became particularly alarmed when media published several photos showing Altona management's Hawaiian management retreats. Taking into consideration the management behaviour critically discuss the relationship between a corporation's shareholders and management. Analyse the problems and costs related to this relationship and explain with example how a company may structure management compensation to mitigate such costs. Case Study 2 Clara bought a house three years ago that cost $750,000. She had 20% deposit and borrowed the rest from Tardis Bank at a rate of 7.2% p.a., compounded monthly, for 10 years. Tardis Bank has now notified Clara that after the last monthly payment for the third year, the interest rate on her loan will increase to 9.6% p.a., compounded monthly, in line with market rates. Also from the fourth year of her loan Clara can either increase the monthly repayment (so as to pay off the loan by the originally agreed date), or she can keep paying the same original monthly repayment and extend the term of the loan. a. Calculate the new monthly repayment if Clara wants to pay off the loan by the originally agreed date. (Show all calculations, show answers correct to two decimal places.) b. Calculate the extra period added to the term of the loan, if Clara keeps on paying the original monthly repayment. (Show all calculations, show final answer correct to whole number.) (Show all calculations and show answers correct to the nearer cent.)

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Part 1 Altona Ltd The relationship between a corporations shareholders and management is critical to the success of the company Shareholders are the owners of the company and they entrust management w... View the full answer