1)Can the goal of maximizing the value of the stock conflict with other goals such as avoiding unethical or illegal behavior? In particular, do subjects like customer and employee safety, the environment and the general good of society fit in this framework, or are they essentially ignored? Think of some specific scenarios to illustrate your answer.

2)Corporate ownership varies around the world. Historically, individuals owned the majority of shares in public corporations in the United States. In Germany and Japan, however, banks, other large financial institutions and other companies own most of the stocks in public corporations. Do you think the agency problems are more likely to be more or less severe in Germany and Japan than in the United States?

3)In recent years, large financial institutions such as mutual funds and pension funds have become the dominant owners of stock in United States, and these institutions are becoming active in corporate affairs. What are the implications of this trend to agency problems and corporate control?

4)Discuss why is the goal of financial management to maximize the current share price of the company's stock? In others words, why isn't the goal to maximize the future share price?

BMCF5103/SIMAD/SEPT16/A-KK OUM BUSINESS SCHOOL ASSIGNMENT SUBMISSION AND ASSESSMENT _________________________________________________________________________ BMCF5103 CORPORATE FINANCE SEPTEMBER 2016 _________________________________________________________________________ INSTRUCTIONS TO STUDENTS 1. This assignment contains question that is set in English. 2. Answer in English only. 3. Your assignment should be typed using 12 point Times New Roman font and 1.5 line spacing. 4. You must submit your hardcopy assignment to your facilitator according to the fixed date. 5. Your assignment should be prepared individually. You should not copy another person's assignment. You should also not plagiarise another person's work as your own. EVALUATION This assignment accounts for 60% of the total marks for the course. BMCF5103/SIMAD/SEPT16/A-KK ASSIGNMENT QUESTION PURPOSE To evaluate the corporate finance concept based on relevant financial information as well as supported by the foundation of corporate finance theories. REQUIREMENT Read and comprehend the following questions provided. Answer the questions using relevant information given in the questions and relevant corporate finance theories. QUESTION a) Can the goal of maximizing the value of the stock conflict with other goals such as avoiding unethical or illegal behavior? In particular, do subjects like customer and employee safety, the environment and the general good of society fit in this framework, or are they essentially ignored? Think of some specific scenarios to illustrate your answer. (25 marks) b) Corporate ownership varies around the world. Historically, individuals owned the majority of shares in public corporations in the United States. In Germany and Japan, however, banks, other large financial institutions and other companies own most of the stocks in public corporations. Do you think the agency problems are more likely to be more or less severe in Germany and Japan than in the United States? (25 marks) c) In recent years, large financial institutions such as mutual funds and pension funds have become the dominant owners of stock in United States, and these institutions are becoming active in corporate affairs. What are the implications of this trend to agency problems and corporate control? (25 marks) BMCF5103/SIMAD/SEPT16/A-KK d) Discuss why is the goal of financial management to maximize the current share price of the company's stock? In others words, why isn't the goal to maximize the future share price? (25 marks) (TOTAL: 100 MARKS) Assignment Format: a. Each answer must contain 750-1250 words and must have introduction, body and conclusion. b. Use double space and 12-point of Times New Roman font. c. The assignment should contain about 3000 - 5000 words (15 - 20 pages) in total. d. Provide reference using the American Psychological Association (APA) format e. References should be latest (year 2009 onwards)