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5 Cards in this Set
- Front
- Back
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What is the overall objective |
To maximise ownership benefits |
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How does time value of money affect wealth |
Different times different value |
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What are the things that wealth maximisation has andprofit maximisation and doesn't |
Cash flow is more a objective in wealth maximisation - profits are manipulated by managers e.g. depreciation Time value of money and risk is considered with wealth maximisation |
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What are the rests of wealth maximisation |
a principal agency problem - a divorce between managers and share holders, managers behave in a satisficing manner rather than a maximising manner There are non financial goals The is a compromise between a objectives |
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What our management of agency costs |
Conflict can be reduced through corporate governance. This is the process in which director of the firm are directed and controlled. Activities and actions are monitored - Annual reporting, non exacted directorship, separate CEO and chairperson Incentive schemes such as bonuses and pensions to encourage E.g Ryan ai4 |
