Agency Costs and Corporate Governance I Introduction Before analysing problems that occur when institutional ownership and control are separated‚ it should be outlined why institutions exist at all. Therefore‚ chapter two examines why organizations occur in economy. Chapter three addresses the agency problem‚ based on this organization. Chapter four addresses the common ways to solve the agency problem and chapter five gives a comparison over the three most important corporate governance systems
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speech‚ Mr Right presented that the market was efficient in the semi-strong form as investors had no benefit in the disclosure of enterprises financial reports‚ due to the information included in those reports was the past information with share prices. Therefore‚ the usefulness of financial reporting to share purchasers and sellers was invalid during their decision making‚ so there were unnecessary for an investor to study financial reports and accounts of companies. I. Capital Market Efficiency
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order to maintain this continued growth in the coming years‚ these companies are both in need of investors who will fund their efforts. Comparison of Current Assets and Current Liabilities Investors and potential investors in these companies will look at and consider a multitude of information before deciding which of these two companies would be a better investment. For instance‚ most investors will look at each company’s current assets and liabilities amounts. In 2004‚ Coca-Cola had more
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CHAPTER 13: CAPITAL STRUCTURE AND LEVERAGE 1. A firm’s business risk is largely determined by the financial characteristics of its industry‚ especially by the amount of debt the average firm in the industry uses. a. True b. False ANSWER: False 2. Financial risk refers to the extra risk borne by stockholders as a result of a firm’s use of debt as compared with their risk if the firm had used no debt. a. True b. False ANSWER: True 3. A firm’s capital structure does not affect its free cash
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‐ Clean‐up the crossholding structure because of up‐coming IPO (dispose of 6% L&H shares) ‐ Minimize capital gain tax on stock sale: new BHV based in BriOsh Virgin Islands will issue bonds and sell them at the book value ‐ AQract foreign investors ‐ Receive financing for company’s acOviOes 09/11/2011 8 Advantages for the shareholders: ‐ Minimizing bankruptcy costs ‐ in case of financial distress exchanging bonds to exchange property may stave off bankruptcy (this is the special feature of exchangeable bonds
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calculations and explain your results. Submit your assignment in the drop box by using the Assignment Submission button. Problem II Volkswagen is considering opening an Assembly Plant in Chattanooga‚ Tennessee‚ for the production of its 2012 Passat‚ tailored for the US market. The CEO of the company is considering two potential options for the size of the plant: one is a large size with a projected annual production of 150‚000 cars‚ and the other one is a smaller size plant‚ which
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traditional IPO processes work verses using the alternative online process I will look at the company AVG and describe in detail which IPO process it would most benefit from. I will explain my reasons for this decision by focusing on the type of investors I believe they will likely attract as well as discuss the costs and the risks associated with each. I will also list various advantages of each IPO process and will then conclude by reaffirming my decision to advise AVG to go with the IPO process
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CONTENTS OF THE REPORT Executive Summary 5 1. Mutual Fund 2-16 • 1.1 What is mutual fund • 1.2 Ttpes of mutual fund • 1.3 Objectives of investment in mutual fund • 1.4 How to invest in Mutual Fund • 1.5 Advantages of mutual fund • 1.6 Disadvantages of mutual fund • 1.7 How to read mutual fund fee table • 1.8 Tips for buying mutual fund 2. Share Market • 2.1 How to Share traded • 2.2 Types of Share Market 2.2.1 Primary Market 2.2.2 Secondary Market
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irrelevance theory is a concept that is based on the premise that the dividend policy of a given company should not be considered particularly important by investors. Further‚ the terms of that dividend policy should not have any bearing on the price of the shares of stock issued by that company. With this particular financial theory‚ the idea is that investors can always sell a portion of their shares if they want to generate some amount of cash flow. As with most investment theories‚ the dividend irrelevance
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market capitalization value development in comparison to its current rival Samsung over the past 22 years. Investors may find this report helpful when considering Apple’s future value growth potential and risk. Statistical Comparison 1990 to 2004 marked a period of unchanged market capitalization value for Apple. Conversely‚ in 2000 Samsung’s shares increased to $50 billion (bn). Considering its collaboration with Yahoo! and Microsoft in the development of networks and innovative software for
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