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- select a “start-up” company in an industry of your choice and provide a brief summary description of the start-up company you chose and the goods or services it provides. 1. As a start-up company, identify three Credit Risks the company currently faces today or could face in the future. Explain in detail why these risks are a threat to the company. 2. What advice would you give to the CEO of the company to prevent or minimize these credit risks?Define and discuss each of the following by providing at least 2 practical examples: 1. Limited Partnership; Limited Liability partnership; Professional corporation? 2. A friend asked you to reveal important financial information of the company, being a finance manager of the company what would you do? Justify by considering ethics in finance. 3. Describe mechanisms that motivate managers to act in stockholders’ best interests, and to overcome agency problem?Question: If you were in Staci’s situation, what would you do? Ethical Dilemma Staci Sutter works as an ana-lyst for Independent Invest-mentBankShares(I2BS),which is a large investment banking organization. Shehas been evaluating an IPO that I2BS is handling for atechnology company named ProTech Incorporated.Staci is essentially finished with her analysis, and sheis ready to estimate the price for which the stockshould be offered when it is issued next week. Accord-ing to her analysis, Staci has concluded that ProTech isfinancially strong and is expected to remain financiallystrong long into the future. In fact, the figures providedby ProTech suggest that the firm’s growth will exceed30 percent during the next five years. For these rea-sons, Staci is considering assigning a value of $35 pershare to ProTech’s stock.Staci, however, has an uneasy feeling about thevalidity of the financial figures she has been evaluating.She believes the…
- 3. You are a CPA working with sole proprietors. Several of your clients are considering incorporating because they need to expand and grow. One client is curious about how her financial reports will change. She’s heard that she may need to prepare a statement of retained earnings and a statement of stockholder’s equity. She’s confused about the difference between the two and what they report. How would you explain the characteristics and functions of the two types of statements?You have just been employed as the new Chief Executive Officer of a medium-sized company that is listed on the Ghana Stock Exchange. At the maiden Board Meeting, the chairman advised you and your management team to avoid what he termed as “Agency problem”. Explain the term “Agency Problem”, and identify four (4) ways by which shareholders can deal with it.CRYou have just been employed as the new Chief Executive Officer of a medium-sized company that is listed on the Ghana Stock Exchange. At the maiden Board Meeting, the chairman advised you and your management team to avoid what he termed as “Agency problem”.Explain the term “Agency Problem”, and identify four (4) ways by which shareholders can deal with it.
- Suppose you are the chief financial officer (CFO) responsible for the financial statements of Philip Morris. What ethical issue would you face as you consider what to report in your company’s annual report about the cash payments? What is the ethical course of action for you to take in this situation? Who are the stakeholder of this company?Assume that you are the owner of a successful small-to-medium-sized business. You want to grow your business and separate it from your personal finances. What should you do? How will you do it? In regard to dividends and earnings, when and how should you and other owners be rewarded? What are examples of each type of dividend? Why do some large corporations forgo dividends?You are the founder of IGRO, an Internet firm that delivers groceries. a. Give an example of an idiosyncratic risk and a systematic risk your company faces. b. As founder of the company, you own a significant portion of the firm, and your personal wealth is highly concentrated in IGRO shares. What are the risks you face, and how should you try to reduce them? c. Given your answer to part b, do you think it is a good idea for lower level employees to have large amounts of stock in their savings when that stock is issued by their employer? Is there an upside, as well as a downside?
- Question: Define and discuss each of the following by providing at least 2 practical examples: Limited Partnership; Limited Liability partnership; Professional corporation? A friend asked you to reveal important financial information of the company, being a finance manager of the company what would you do? Justify by considering ethics in finance. Describe mechanisms that motivate managers to act in stockholders’ best interests, and to overcome agency problem?You are a CPA working with sole proprietors. Several of your clients are considering incorporating because they need to expand and grow. One client is curious about how her financial reports will change. Shes heard that she may need to prepare a statement of retained earnings and a statement of stockholders equity. Shes confused about the difference between the two and what they report. How would you explain the characteristics and functions of the two types of statements?Explaining financial statements Caleb King is interested in investing in Orange Corporation. What types of tools should Caleb use to evaluate the company?