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You are running a company that is owned by stockholders. Your goal is to maximize shareholder value.

2. You are running a company that is owned by stockholders. Your goal is to maximize shareholder value. Explain how each of the following events is likely to affect shareholder value and identify uncertainties related to their effects.
3.
4. Tariffs on the product you sell are reduced and you face more foreign competition.
5. Tariffs on several of the major inputs you use to produce your product are reduced.
6. New pollution control requirements are implemented.
7. Inflation rates rise.
8. A new technology is available that reduces the cost of production.
9.
10. Compare the three investments below in terms of their riskiness. What is the best way to evaluate the riskiness of an investment given the information you have on them?

Project Expected Return Standard Deviation
A $100,000 $25,000
B $200,000 $40,000
C $50,000 $20,000

11. Find the derivatives of each of the following functions, and their points of maximization or minimization if possible.

a. TC = 1500 - 100 Q + 2Q2
b. ATC = 1500/Q - 100 + 2Q
c. MC = -100 +4Q
d. Q = 550 – 0.5 P
e. Profits = -1500 +1200 Q – 4Q2
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10. Compare the three investments below in terms of their riskiness. What is the best way to
evaluate the riskiness of an investment given the information you have...

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