Answer:
$4.24287 million per year
Explanation:
Missing question: The swap will call for the exchange of 1 million euros for a given number of dollars in each year.
For structured three separate forward contracts of the exchange of currencies, the forward price could be found as follows
Forward exchange rate * $1 million error = Dollar to be received
Year 1 = 1.50*(1.04/1.03) * 1 million euros
Year 1 = 1.514563106796117 * 1 million euros
Year 1 = $1.5145 million
Year 2 = 1.50*(1.04/1.03)^2 * 1 million euros
Year 2 = 1.529267602978604 * 1 million euros
Year 2 = $1.5293 million
Year 3 = 1.50*(1.04/1.03)^3 * 1 million euros
Year 3 = $1.5441 million
The number of dollars each year is determined by computing the present value:
= 1.5145 / 1.04 + 1.5293 /(1.04)^2 +1.5441 / (1.04)^3
= 1.45625 + 1.41392 + 1.3727
= $4.24287 million per year
Answer:
Agency conflicts between managers and shareholders
1. A New Beginning (ANB)
A. Yes; Alexander is misappropriating some of Akiko's wealth by unilaterally purchasing a nonbusiness asset using ANB's funds.
2. The Green Zone Inc. (TGZ):
B. No; although an agency relationship exists between TGZ's management-including Tae as TGZ's chairman and CEO and the firm's shareholders-there is no agency conflict, because no expropriation or wasting of the shareholders' wealth has occurred.
3. In the best interest of shareholders, compensation packages should be structured in a way such that managers have an incentive to maximize the__LONG-TERM____value of the company's common stock price.
4. In addition to well-designed executive compensation packages, two other motivational forces can align the interests of managers with those of their shareholders.
a. Reward the manager with a combination of salary and stock options
b. Let the manager to understand that a takeover can happen if she does not perform well.
5. In the late 1980s and early 1990s, Congress passed legislation making it more difficult for outside investors to stage hostile takeovers. This legislation likely__increases____conflicts between managers and stockholders.
Explanation:
Agency conflicts of interest exist in any relationship where one party is expected to act in another's best interests. Agency problems or conflicts of interest usually exist between a company's management and the company's stockholders. But, it can equally exist in a relationship where one party acts against the interest of the other.
Answer:
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Explanation:
