Beruflich Dokumente
Kultur Dokumente
Principles of
Corporate Finance
Tenth Edition
Goals and
Governance of the
Firm
Slides by
Matthew Will
McGraw-Hill/Irwin
Topics Covered
Corporate Investment and Financing
Decisions
The Role of the Financial Manager and the
Opportunity Cost of Capital
Goals of the Corporation
Agency Problems and Corporate
Governance
1-2
1-3
Financial Assets
Financial claims to the income generated by the
firms real assets.
1-4
Financing decision
sale of financial assets
1-5
1-6
Tangible Assets
Intangible Assets
Expand Stores
@ $800 million
@ $800 million
1-7
$10 billion.
(26,289 billion)
Wal-Mart ($379billion)
$15.1 billion.
exchange of shares.
Numanthia Termes.
1-8
(1)
Financial
manager
Firm's
operations
(3)
1-9
(4a)
(4b)
Financial
markets
Treasurer
Controller
1-10
1-11
1-12
1-13
1-14
1-15
1-16
1-17
Agency Problem
1-18
Different Objectives
Managers vs.
stockholders
Top mgmt vs.
operating mgmt
Stockholders vs. banks
and lenders
Agency Problem
Agency costs are incurred when:
1. managers do not attempt to maximize firm value and
2. shareholders incur costs to monitor the managers and
constrain their actions.
1-19
Agency Problem
Agency Problems
Managers, acting as agents for stockholders,
may act in their own interests rather than
maximizing value.
Stakeholder
Anyone with a financial interest in the firm.
1-20
Agency Problem
1-21
Agency Problem
Agency Problem and Corporate Governance
Solutions
1.Legal and Regulatory Requirements
2.Compensation plans
3.Board of Directors
4.Monitoring
5.Takeovers
6.Shareholder pressure
1-22
Web Resources
Click to access web sites
Internet connection required
www.corpgov.net
www.thecorporatelibrary.com
www.riskmetrics.com
1-23