Problem 1. Compare and contrast shareholder maximization to stakeholder value maximization. Describe market forces that influence the ideological tension between shareholder and stakeholder. How does a shareholder define value?
Problem 2. Discuss the different options for divesting business units. What are the advantages and disadvantages of each option?
Problem 3. What do we mean when we say, "the objective is to maximize shareholder value"?
Problem 4. Why is sound capital budgeting essential to the value manager in the new era of maximizing shareholder value?
Problem 5. In this new era of seeking to maximize shareholder value, with its resulting pressures to perform, why is there an increased likelihood of corporate fraud in financial reporting (financial statement integrity)?
Message Board Questions
Problem 6. In reference to the textbook, explain the concept of ROIC.
Problem 7. How does capital budgeting impact a value manager's decision to grow the size of a firm?
Problem 8. Why is it important for the value analyst to verify the execution of the business plan of a firm?