Ethics and Firm discussion and Cash flow

Ethics and Firm discussion and Cash flow - 1. Ethics and...

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1. Ethics and Firm's Goals Review Concept Questions 3, 5 and 6. Can goals like avoiding unethical or illegal behavior be in conflict with the goal of the firm? How does this complicate the agency problem? Fully explain your reasoning in at least 200 words. Respond to at least two of your fellow students' postings. 3) Agency Problems Who owns a corporation? Describe the process whereby the owners control the firm’s management. What is the main reason that an agency relationship exists in the corporate form of organization? In this context, what kinds of problems can arise? 5. Goal of the Firm Evaluate the following statement: Managers should not focus on the current stock value because doing so will lead to an overemphasis on short-term profits at the expense of long-term profits. 6. Ethics and Firm Goals Can our goal of maximizing the value of the stock conflict with other goals, such as avoiding unethical or illegal behavior? In particular, do you think subjects like customer and employee safety, the environment, and the general good of society fit in this framework, or are they
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This note was uploaded on 02/03/2012 for the course ECON 101 taught by Professor 123 during the Spring '97 term at University of Kelaniya.

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Ethics and Firm discussion and Cash flow - 1. Ethics and...

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