Maximizing shareholder wealth means managers must

Maximizing shareholder wealth means managers must make decisions only after assesing its returns (cash inflows or outflows) and the risk involved (Gitman & Zutter, 2012).
By adding "subject to ethical constraint" to the statement, it tells us that some business decisions may or may not affect cash flow projections. For exmaple,
the decision may be to cut back on salary expenses to redue cash outflows. It would unethical for someone to fire an employee that makes above minimum wage to hire someone else
at minimum wage.
E2-4
Your broker calls to offer you the investment opportunity of a lifetime, the chance to
invest in mortgage-backed securities. The broker explains that these securities are
entitled to the principal and interest payments received from a pool of residential
mortgages. List some of the questions you would ask your broker to assess the risk
of this investment opportunity.
1. What kind of amount of investment are we talking about? 3. What is the expected percentage of return? 5. What is the plan if mortgage payments stop being made by resident?
6. How long will it take to make my investment back?