Quiz 2 - Quiz #2 Lecture 4 Corporate governance The system...

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Quiz #2 Lecture 4 Corporate governance The system of rights, processes and controls established internally and externally over the management of a business entity with the objective of protecting the interest of stakeholders o Issue of corporate governance: how best to protect shareholders Who are the relevant shareholders that need protection Recent issued for this country and abroad, driven by three events o Expanding shareholder base of corporations and the resulting separation of owners and managers o Corporate abuses o Globalization of companies in non-resident financial markets Macro implications o Because corporations playa key role in the generation and allocation of a country’s resources Micro implications o Increasing world of globalization firms need to practice good corporate governance as to Continue to attract consumers and workers Have access to global financial markets Sarbanes-Oxely act 2002 o Requires the certification of financial reports by chief executive officers and CFO’s Corporate models Shareholder wealth structure: o Believes that a firm’s objective should be to maximize shareholder wealth o Wealth Is seen as strictly financial o Capital budgeting techniques include NPV and IRR o Models accepts hostile takeovers to ensure appropriate financial performance Corporate wealth structure: o Believe that a firm’s objective should be to maximize corporate wealth, which includes shareholders employees community banks owners
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This note was uploaded on 02/27/2008 for the course INBU 4200 taught by Professor Palmer,m during the Fall '07 term at Colorado.

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Quiz 2 - Quiz #2 Lecture 4 Corporate governance The system...

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