1) The U.S. subprime mortgage crisis was a set of events and conditions that led to the 2007-2009 global financial crisis. Discuss in detail the central factors that caused this crisis. Being a financial manager what measures should you take to safeguard your business against any contagion impact in the presence of an emerging financial crisis? Support your answer with examples.

2) Explain how large amounts of free cash flow held by managers could be harmful to the shareholders.