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WARRIOR [948]
3 years ago
10

Discuss the corporate control of your business. Explain why your business in Mexico is exposed to agency problems

Business
1 answer:
Wittaler [7]3 years ago
5 0

Answer:

Corporate Control and Agency Problems

For  instance, Mr. Jones has a business in Mexico and hires professional managers, but he cannot be there to control their actions always.  There are lots of agency problems because of the conflict of interests that is prevalent and the inexistence of goal congruence.

His corporate managers are his agents, as the stockholder.  However, most times, these managers do not run the businesses they are entrusted with fiduciary duties in the best interests of  Mr. Jones or the principals who appointed them to the positions.  They carry out their own agendas and try to satisfy their selfish interests.

Explanation:

Is there any wonder Mr. Jones' business in Mexico is exposed to agency problems?  The managers who are your agents will never, at all times, protect your interests in the business.  They try as much as possible to satisfy their own interests.  Where there is no goal congruence, managers will always expose their principals to agency problems.  To curtail these problems, Mr. Jones and the other stockholders must devise means to align the interests of the managers with those of the stockholders.  One of the ways of achieving this is through stock compensation and the limitation of compensation in cash.

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Assume there are currently five firms producing and selling computer chips in the European market. Also assume that the product
irina1246 [14]

Answer: C. Increase

Explanation:

An oligopoly is a market structure in which a few firms dominate. When a market is shared between a few firms, it is said to be highly concentrated. Although only a few firms dominate, it is possible that many small firms may also operate in the market.

Where few firms dominate the equilibrium price will increase because the demand will be high, and this will make the equilibrium price increase.

3 0
3 years ago
Read 2 more answers
If the Fed conducts open-market purchases, the money supply A. decreases and aggregate demand shifts right. B. increases and agg
Nataly_w [17]

If the Fed conducts open-market purchases, the money supply increases and aggregate demand shifts right.

Answer: Option B

<u>Explanation:</u>

With the Fed conducting an open market purchase, the people will sell of the securities that they possess. In return they will get money from the fed for the purchases that it makes. With the increase in the supply of money in the economy, there will be more demand by the people in the economy.

Therefore the aggregate demand curve will shift to the right direction showing more demand of the goods and services by the people in the economy.

4 0
2 years ago
A system of accounting for manufacturing operations that produces timely information about inventories and manufacturing costs p
sasho [114]

Answer:

The answer is cost accounting system.

Explanation:

Cost accounting is a tool that allows you to estimate the actual price of the products, which allows you to establish a profit margin for each unit sold. Depending on the activity of the company, several techniques are used such as production costing, process costing, standard costing, absorption costing, etc.

5 0
2 years ago
Assume that the risk-free rate of interest is 6% and the expected rate of return on the market is 16%. A share of stock sells fo
Tju [1.3M]

Answer: Price of stock at year end =$53

Explanation:

we first compute the Expected rate of return using the CAPM FORMULAE that

Expected return =risk-free rate + Beta ( Market return - risk free rate)

Expected return=6% + 1.2 ( 16%-6%)

Expected return= 0.06 + 1.2 (10%)

Expected return=0.06+ 0.12

Expected return=0.18

Using the formulae Po= D1 / R-g  to find the growth rate

Where Po= current price of stock at $50

D1= Dividend at $6 at end of year

R = Expected return = 0.18

50= 6/ 0.18-g

50(0.18-g) =6

9-50g=6

50g=9-6

g= 3/50

g=0.06 = 6%

Now that we have gotten the growth rate and expected return, we can now determine the price the investors are expected to sell the stock at the end of year.

Price of stock = D( 1-g) / R-g

= 6( 1+0.06)/ 0.18 -0.06

=6+0.36/0.12

=6.36/0.12=  $53

3 0
3 years ago
Maria is flagged as a special customer at your firm because she is a satisfied customer, returns to your company to buy, puts he
KIM [24]

Answer:   Advocate

                     

Explanation: In simple words, advocate level is the topmost stage in the loyalty ladder. In this stage, the customer gets used to for the brand and along with repurchasing it he or she also works as a promotional toll for the brand.

In the given case, Maria has been repurchasing the products from the firm and is also praising the brand online. Hence we can conclude that she is on the advocate rung.

4 0
3 years ago
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