As noted in the upper portion of figure 11 the

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Unformatted text preview: n by receiving dividends—periodic distributions of earnings—or by realizing gains through increases in share price. As noted in the upper portion of Figure 1.1, the stockholders vote periodically to elect the members of the board of directors and to amend the firm’s corporate charter. The board of directors has the ultimate authority in guiding corporate affairs and in making general policy. The directors include key corporate personnel as well as outside individuals who typically are successful businesspeople and executives of other major organizations. Outside directors for major corporations are generally paid an annual fee of $10,000 to $20,000 or more. Also, they are 1. Some corporations do not have stockholders but rather have “members” who often have rights similar to those of stockholders—that is, they are entitled to vote and receive dividends. Examples include mutual savings banks, credit unions, mutual insurance companies, and a whole host of charitable organizations. CHAPTER 1 FIGURE 1.1 The Role and Environment of Managerial Finance 7 Corporate Organization The general organization of a corporation and the finance function (which is shown in yellow) Stockholders elect Board of Directors Owners hires President (CEO) Vice President Human Resources Vice President Manufacturing Vice President Finance (CFO) Managers Vice President Marketing Treasurer Capital Expenditure Manager Financial Planning and Fund-Raising Manager Credit Manager Cash Manager president or chief executive officer (CEO) Corporate official responsible for managing the firm’s day-to-day operations and carrying out the policies established by the board of directors. Vice President Information Resources Controller Foreign Exchange Manager Pension Fund Manager Tax Manager Corporate Accounting Manager Cost Accounting Manager Financial Accounting Manager frequently granted options to buy a specified number of shares of the firm’s stock at a stated—and often attractive—price. The president or chief executive offic...
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This document was uploaded on 01/19/2014.

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