公司理财20498963.pptVIP

1.* A Lecture Tip provides an example that illustrates conflicts may also arise between bondholders and stockholders. 1.* Incentives – discuss how incentives must be carefully structured. For example, tying bonuses to profits might encourage management to pursue short-run profits and forego projects that require a large initial outlay. Stock options may work, but there may be an optimal level of insider ownership. Beyond that level, management may be in too much control and may not act in the best interest of all stockholders. The type of stock can also affect the effectiveness of the incentive. A recent issue with option’s backdating also seems to run counter to the purpose of aligning incentives. Corporate control – ask the students why the threat of a takeover might make managers work toward the goals of stockholders. Other groups also have a financial stake in the firm. They can provide a valuable monitoring tool, but they can also try to force the firm to do things that are not in the owners’ best interests. Video Note: This video looks at the changing role of the Chief Financial Officer (CFO). 1.* 1.* Video Note: This video discusses how capital is raised in financial markets and shows an open-outcry market at the Chicago Board of Trade. Discuss the cash flows to the firm. You might have students turn to Figure 1.2 in their book to see an illustration of the cash flows. The main point is that cash comes into the firm from the sale of debt and equity. The money is used to purchase assets. Those assets generate cash that is used to pay stakeholders, reinvest in additional assets, repay debtholders, and pay dividends to stockholders. The Lecture Tip in the IM provides an interesting example of full disclosure in a firm’s IPO prospectus. Students are often confused by the fact that the NASDAQ is an OTC market. Explain that the NASDAQ market site is just a convenient place for reporters to show how stocks are moving, but that trading does not actually t