Financial Management Decisions

Before beginning work on this week’s discussion forum, please review the link Doing Discussion Questions Right, the expanded grading rubric at the end of this assignment, and any specific instructions for this week’s topic.

By the due date assigned respond to the discussion questions below and submit your responses to the Discussion Area. By the end of the week, comment on your classmates’ responses.

Respond to the questions using the lessons and vocabulary found in the reading.

Support your answers with examples and research and cite your research using the APA format.

Start reviewing and responding to the postings of your classmates as early in the week as possible.

Financial Management Decisions

On the basis of the knowledge you gained from your readings, respond to the following questions:

  • Suppose management is examining policies that relate to maximizing profit and maximizing the wealth of the stockholders. Which of the aims, in the previous sentence, should be of higher priority to management and why?
  • Management decisions are sometimes not acceptable to shareholders, which creates conflicts. These conflicts are called agency problems.
    • Why do such conflicts develop? Provide at least two examples of agency problems.
    • Are such conflicts more likely to occur in smaller or larger organizations? Why?
    • What can be done to decrease the likelihood of these conflicts? Illustrate your answer using the two examples you gave.