Unformatted text preview: risky negative NPV projects to try and hit a home run. 5. Avoid returning capital to investors by making excess investments in marketable securities or by paying too much for acquisitions. 6. Massage information releases or manage earnings to avoid revealing bad news. m. The managers at KFS have heard that corporate governance can affect shareholder value. What is corporate governance? List five corporate governance provisions that are internal to a firm and are under its control. Answer: Corporate governance is the set of laws, rules, and procedures that influence a company’s operations and the decisions made by its managers. The provisions under a firm’s control are: (1) monitoring and discipline by the board of directors; (2) charter provisions and bylaws that affect the likelihood of hostile takeovers; (3) compensation plans; (4) capital structure choices; and (5) accounting control systems....
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- Spring '08
- Management, ROIC, risky negative NPV, NPV projects