Corporate Assignment Abdisamad

Student ID :
CGSSO00015316
Student Name :
Abdisamad Abdullahi Abdulle
Course Code :
BMCF5103
Course Name :
Corporate finance
Program :
Master Of Business Administration MBA
Semester :
Five
Assignment :
Answers
Facilitator :
Ibraahim Moh’ud Hamud
Date due :
12 Nov, 2014
Submission Date :
12 Nov, 2014

1.0 QUESTIO N ONE

1.1
Introduction
3
1.2
Value maximization and other goals

3
1.3
Customer and employee safety
4
1.4
General goodness of society
4
1.5
Conclusion
5

2.0 QUESTION TWO
2.1
Introduction
6
2.2 Corporate ownership

6
2.3
Agency problem
8
2.4
Conclusion
8

3.0 QUESTION THREE
3.1
Introduction
9
3.2 The emergence of institutional investors

9
3.3
Implications of institutional investors on agency problem
10
3.4
Implications of institutional investors on control
11
3.5
Conclusions
12

4.0 QUESTION FOUR
4.1
Introduction
12
4.2 The goal of financial management

13
4.3
Conclusion
14

REFERENCE 16

QUESTION ONE
Can the goal of maximizing the value of the stock conflict with other goals such as avoiding unethical or illegal behavior? In particular, do subjects like customer and employee safety, the environment and the general good of society fit in this framework, or are they essentially ignored? Think of some specific scenarios to illustrate your answer.
1.0 ANSWER
1.1 INTRODUCTION
Value maximization would probably be the most commonly cited business goal, but this is not the only thing to create. Business and service organizations exist to create valued goods and services that people need or desire. In this piece of writing first, I would look if maximizing the value of stock conflicts with other goals of the organization. Second, I will examine how it effects the value maximization on