Question: 1. What are some of the problems involved in implementing the goal of maximization of shareholder wealth?
2. What is the relationship between financial decision making and risk and return? Would all financial managers view risk-return trade-offs similarly?
3. Firms often involve themselves in projects that do not result directly in profits. For example, Apple, which we featured in the chapter introduction, donated $50 million to Stanford University hospitals and another $50 million to the African aid organization (Product) RED, a charity fighting against AIDS, tuberculosis, and malaria. Do these projects contradict the goal of maximization of shareholder wealth? Why or why not?