Glossary Terms (WK1)

Glossary Terms (WK1) - Glossary Glossary Chapter 1 agency...

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Glossary Glossary Chapter 1 agency costs Costs that arise due to conflicts of interest between shareholders and managers. agency problems The conflict between the goals of a firm's owners and its managers. boards of directors Elected by shareholders to be responsible for hiring and firing managers and setting overall corporate policies. capital budgeting function Selecting the best projects in which to invest the resources of the firm, based on each project's perceived risk and expected return. collective action problem When individual stockholders expend time and resources monitoring managers, bearing the costs of monitoring management while the benefit of their activities accrues to all shareholders. corporate charter The legal document created at the corporation's inception to govern its operations. corporate finance The activities involved in managing money in a business environment. corporate governance function Developing ownership and corporate governance structures for companies that ensure that managers behave ethically and make decisions that benefit shareholders. corporation
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Glossary Terms (WK1) - Glossary Glossary Chapter 1 agency...

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