Can someone help to detailed answer of concept question 1?

This chapter introduced you to some of the basic ideas in corporate finance: Corporate finance has three main areas of concern: Capital budgeting: What long-term investments should the firm take? Capital structure. Where will the firm get the long-term financing to pay for its investments? Also, what mixture of debt and equity should it use to fund operation? Working capital How should the firm manage its everyday financial activities The goal of financial management in a for-profit business is to make decisions that increase the value of the stock, or, more generally, increase the value of the to the equality. The corporate form of organization is superior to other forms when it comes to raising money and transferring ownership interests, but it has the significant disadvantage of double taxation. There is the possibility of conflicts between stockholders and management in a large corporation. We called these conflicts agency problems and discussed they might be controlled and reduced. The advantages of the corporate form are enhanced by the existence of financial markets. Of the topics we've discussed thus far, the most important is the goal of financial management; maximizing the value of the stock. Throughout the text we will be analyzing many different financial decisions, but we will always ask the same question: How does the decision under consideration affect the value of the stock? Agency Problems Who owns a corporation? Describe the process whereby the owners control the firm's management. What is the main reason that an agency relationship exists in the corporate form of organization? In this context, what kinds of problems can arise? Not-for-Profit Firm Goals Suppose you were the financial manager of a not-for-profit business (a not-for-profit hospital, perhaps). What kinds of goals do you think would be appropriate