Define the terms finance and financial management. What are the major sub-areas of finance?
Identify and define the three basic forms of business ownership. Describe the advantages and disadvantages of each.
Define the terms agency relationship and agency problem. Explain three different approaches to minimizing the agency problem.
Explain why ethical behavior is so important in the field of finance.
Explain the concept of shareholder wealth maximization. Is there a conflict between the goal of shareholder wealth maximization and the financial manager’s need to act in an ethical manner? Why or why not?
Sample Solution
