Agency Costs of Free Cash Flow‚ Corporate Finance‚ and Takeovers Michael C. Jensen Harvard Business School MJensen@hbs.edu Abstract The interests and incentives of managers and shareholders conflict over such issues as the optimal size of the firm and the payment of cash to shareholders. These conflicts are especially severe in firms with large free cash flows—more cash than profitable investment opportunities. The theory developed here explains 1) the benefits of debt in reducing agency
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sure to put your answers to the multiple choice questions on your Scantron form. The exam is closed book. A calculator is permitted. GOOD LUCK. Please circle the best answer and fill-in the corresponding circle on your Scantron sheet. Only answers on the Scantron will be scored. PART I: Multiple Choice. Please circle the best answer and fill-in the corresponding circle on your Scantron sheet. Only answers on the Scantron will be scored. Please use the following information to answer questions
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1. Excecutive Summary 1.0 Introduction FRANKROJEIAN Snack House start-up a small bakery that rent in 1.1 The Company FRANKROJEIAN Snack House is a Partnership business‚ this will be under supevision of the five partners as the owner of the business. The business wiill be renting a space at the Sienna building Alunan Avenue near government offices‚ schools and private sectors. 1.2 The Products and Servies FRANKROJEIAN Snack House offers the following food and beverages to customers • Cakes
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Describe the schedule of cost goods manufactured. How does it tie into the income statement? 5. Why are product costs sometimes called inventoriable costs? Describe the flow of such costs in a manufacturing company from the point of incurrence until they finally become expenses on the income statement. 6. Is it possible for costs such as salaries or depreciation to end up assets on the balance sheet? Explain. 7. “The variable cost per unit varies with output‚ whereas the fixed cost per unit is constant
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ADM 3301 Sample Mid-term Exam Duration: 2.5 hours Student name:_______________________ Student No.__________________ INSTRUCTIONS: 1- Write down the exam copy number (that exists at the top right corner of this page) on the identification white card next to your name. 2- Verify that your exam has 9 pages (including this title page). 3- Answer all questions on your examination copy. Use the opposite (blank) side‚ if necessary. Answers or calculations written on the sheet
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Name: Class: Cost Accounting Date: 02.12.2012 Quiz 5 1) Absorption costing: A) expenses marketing costs as cost of goods sold B) treats direct manufacturing costs as a period cost C) includes fixed manufacturing overhead as an inventoriable cost D) is required for internal reports to managers 2) Variable costing: A) expenses administrative costs as cost of goods sold B) treats direct manufacturing costs as a product cost C) includes fixed manufacturing overhead as an inventoriable
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Monitoring and evaluating knowledge management strategies Nature does not measure. Nature recognizes patterns. (Senge) IKM Background Paper October 2009 Joitske Hulsebosch‚ Mark Turpin and Sibrenne Wagenaar IKM Background Paper‚ Monitoring and evaluating knowledge management strategies. October 2009. About IKM Emergent In April 2007‚ a five-year research programme was approved for funding by the Directorate General for International Cooperation (DGIS)‚ which is part of the Dutch Ministry
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QUESTIONS ON CHAPTER 15 (COST OF CAPITAL) 1.) The Wind Rider Company has just issued a dividend of $2.10 per share on its common stock. The company is expected to maintain a constant 7% growth rate on its dividends indefinitely. If the stock sells for $40 a share‚ what is the company’s cost of equity? 2.) The Ball Corporation’s common stock has a beta of 1.15. If the risk free rate is 5% and the expected return on the market is 12%‚ what is Ball Corp.’s cost of equity capital?
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Health Care Provider and Faith Diversity: First Draft As health care practioners we should be aware of our own personal attitudes‚ beliefs‚ biases‚ and behaviors‚ besides our morals as health care practioners. Health care providers should include patients’ spiritual practice in their care as this brings positive outcomes such as decreased feeling of anxiety and depression‚ improves their coping skills‚ promote healthy behavior‚ and believe in hope. In times of critical illness we turn towards God
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In the books of a Company Cost Sheet for the period ended…….. Units Produced….. Name of the product unit sold…. Particulars Total cost Rs. Unit Cost Rs. Opening stock raw materials Add Purchases of Raw Materials Add: Expenses on Purchases of Raw Materials (octroi & duty) Less: Closing stock of raw materials Less: Sale of scrap or defectives of raw materials = Cost of materials consumed Add: Productive Labour Add: Outstanding wages Add: Direct Expenses( architect’s
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