Financial managers make three main decisions:
Which products or services to offer?
How to acquire the funds necessary to offer the products and services, such as using cash on hand, borrowing, or selling shares in the firm?
What to do with the cash flow generated by the firm, such as pay dividends, repurchase shares, reinvest it in the business, or hold on to it?
Which of these decisions do you think is the most important for creating value for the corporation’s owners? Why? (Note: Your response for this question should be no more than 50 words)
A guest speaker in class states “managers should only focus their attention on what shareholders want because they are the owners of the firm and the managers work for the shareholders”. Offer your view on this statement based on your readings, life experiences, and ethics.
