WPC 480 Final Exam Questions With
Complete Solutions
corporate governance mechanisms to determine and control strategic direction of
organizations, helps make more effective strategic decisions
own, run Shareholders ___ firms, while professional managers ___ them
shareholders ___want: appreciation (and dividends), relatively high risk (diverse
portfolios)
Managers __want: high pay, low risk (not diversified, employment risk)
institutions many large shareholders are ____
Carl Icahn 1. Corp raider (activist)
2. Convinced Apple to pay their only dividend
3. uses stake to get influence to push through changes to improve performance
, WPC 480 Final Exam Questions With
Complete Solutions
board of directors represents shareholders by monitoring and controlling firm's top-level
executives
board of directors oversees and signs off on all major strategic initiatives, may not always
have enough insight into firm operations to weight in on major strategic decisions
outsiders individuals who are independent of the firm in terms of day-to-day ops
insiders firm's CEO and other top-level managers
related outsiders individuals not involved with the firm's day-to-day ops, but who have a
relationship with the company
boards to make ___ better: maximum level of firm specific (internal) knowledge balanced
with independent/unbiased knowledge
stock awards given to manager as part of compensation package, set vesting period
Complete Solutions
corporate governance mechanisms to determine and control strategic direction of
organizations, helps make more effective strategic decisions
own, run Shareholders ___ firms, while professional managers ___ them
shareholders ___want: appreciation (and dividends), relatively high risk (diverse
portfolios)
Managers __want: high pay, low risk (not diversified, employment risk)
institutions many large shareholders are ____
Carl Icahn 1. Corp raider (activist)
2. Convinced Apple to pay their only dividend
3. uses stake to get influence to push through changes to improve performance
, WPC 480 Final Exam Questions With
Complete Solutions
board of directors represents shareholders by monitoring and controlling firm's top-level
executives
board of directors oversees and signs off on all major strategic initiatives, may not always
have enough insight into firm operations to weight in on major strategic decisions
outsiders individuals who are independent of the firm in terms of day-to-day ops
insiders firm's CEO and other top-level managers
related outsiders individuals not involved with the firm's day-to-day ops, but who have a
relationship with the company
boards to make ___ better: maximum level of firm specific (internal) knowledge balanced
with independent/unbiased knowledge
stock awards given to manager as part of compensation package, set vesting period
