管理学基础英语教材PPTChapter 12.pptx

;Chapter 12;Brainstorming;Text A ;The Role of Financial Manager;What is Financial Management? ;Investment Decision;Financing Decision ;Asset Management Decision ;The Goal of the Firm ;Frequently, profit maximization is offered as the proper objective of the firm. Maximizing earnings per share is often advocated as an improved version of profit maximization. However, It does not specify the timing or duration of expected returns. Risk is not considered. Does not allow for the effect of dividend policy on the market price of the stock. Maximizing earnings per share may not be the same as maximizing market price per share. The market price of a firm’s stock represents the focal judgment of all market participants as to the value of the particular firm.;Management is under continuous review. Hareholders who are dissatisfied with management performance may sell their shares and invest in another company. This action, if taken by other dissatisfied shareholders, will put downward pressure on market price per share. Management must focus on creating value for share-holders. This requires management to judge alternative investment, financing, and asset management strategies in terms of their effect on shareholder value (share price). Management should pursue product-market strategies. Building market share Increasing customer satisfaction;The causes of agency problems: The separation of ownership and control in the modern corporation The objectives of management may differ from those of the firm’s shareholders;Jensen and Meckling were the first to develop a comprehensive theory of the firm under agency arrangements。 They showed that the principals, in our case the shareholders, can assure themselves that the agents (management) will make optimal decisions only if appropriate incentives are given and only if the agents are monitored. Incentives include stock options, bonuses, and perquisites and these must be directly related to how close management decisions come to t