Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd Logo
Upload

Welcome to Scribd!

  • Nanyang Business School AB1201 Financial Management Seminar Questions Set 1: Introduction (Common Questions)

    Uploaded by

    cccq
    30 views1 page
    This document contains 5 questions from a seminar on financial management: 1) In Singapore, dividends are not taxed for corporations like in the US, so there may not be a tax disadvantage to setting up a corporation over a sole proprietorship. 2) Of the 3 estimates of a stock's intrinsic value, the estimate from the company's CFO would likely be viewed with the least confidence due to potential conflicts of interest. 3) Stockholders may view a donation that benefits the local community positively but releasing untreated waste negatively as it risks legal and environmental issues that could impact stock price. 4) True statements include maximizing long-run stockholder value as the goal and corporations

    Original Description:

    Original Title

    Sem01qna(1)

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    This document contains 5 questions from a seminar on financial management: 1) In Singapore, dividends are not taxed for corporations like in the US, so there may not be a tax disadvantage to setting up a corporation over a sole proprietorship. 2) Of the 3 estimates of a stock's intrinsic value, the estimate from the company's CFO would likely be viewed with the least confidence due to potential conflicts of interest. 3) Stockholders may view a donation that benefits the local community positively but releasing untreated waste negatively as it risks legal and environmental issues that could impact stock price. 4) True statements include maximizing long-run stockholder value as the goal and corporations

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    30 views1 page

    Nanyang Business School AB1201 Financial Management Seminar Questions Set 1: Introduction (Common Questions)

    Uploaded by

    cccq
    This document contains 5 questions from a seminar on financial management: 1) In Singapore, dividends are not taxed for corporations like in the US, so there may not be a tax disadvantage to setting up a corporation over a sole proprietorship. 2) Of the 3 estimates of a stock's intrinsic value, the estimate from the company's CFO would likely be viewed with the least confidence due to potential conflicts of interest. 3) Stockholders may view a donation that benefits the local community positively but releasing untreated waste negatively as it risks legal and environmental issues that could impact stock price. 4) True statements include maximizing long-run stockholder value as the goal and corporations

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    of 1

    Strictly for course AB1201 internal circulation only.

    Nanyang Business School


    AB1201 Financial Management
    Seminar Questions set 1: Introduction
    (Common Questions)

    1) In the U.S., corporations are subjected to double taxation. In Singapore, dividends to


    shareholders of corporations are not taxed. In this case, would there still be a tax
    disadvantage to setting up a corporation rather than a sole proprietorship in Singapore?

    2) Suppose three honest individuals gave you their estimates of Stock X’s intrinsic value.
    One person is your current roommate, the second person is a professional security analyst
    with an excellent reputation on Wall Street, and the third person is Company X’s CFO. If
    the three estimates differed, in which one would you have the most confidence? Why?

    3) The president of Southern Semiconductor Corporation (SSC) made this statement in the
    company’s annual report: “SSC’s primary goal is to increase the value of our common
    stockholders’ equity.” The newspapers also reported the following news on SSC.
    a) The company contributed $1.5 million to the symphony orchestra in Birmingham,
    Alabama, its headquarters city.
    b) In an effort to reduce cost, SSC’s plant released untreated industrial waste into the
    nearby river.
    Discuss how SSC’s stockholders might view each of these actions, and how they might
    affect the stock price.

    4) True or False. Evaluate whether the below statements are true or false. Explain.
    a) If management maximizes the firm's expected profits for the current year, this will also
    maximize the stockholders' wealth as of the current year.
    b) The goal of financial management is to minimize the firm's risks because most
    stockholders dislike risk. In turn, this will maximize the firm's stock price.
    c) The goal of financial management is to maximize the long-run value of stockholders’
    claims.
    d) One reason a business might choose to operate as a corporation rather than as a
    proprietorship or a partnership is that corporations generally find it easier to raise large
    amounts of capital.

    5) If a company’s board of directors wants management to maximize shareholder wealth,


    should the CEO’s compensation be set as a fixed dollar amount, or should the
    compensation depend on how well the firm performs? If it is to be based on performance,
    how should performance be measured?

    Page 1 of 1

    You might also like