Please Answer Part 1 And Part 2 In 350 Words In APA

Question

Please Answer Part 1 And Part 2 In 350 Word Limit In APA Format With T Part 1 of this discussion explores the divergence that can occur between stockholders' interests and management's goals. Although theoretically aligned, in practice, managers sometimes pursue personal gains, such as excessive compensation or extravagant expenditures, which may not align with shareholder wealth maximization (Jensen & Meckling, 1976). A notable example is the 2018 overspending scandal involving a CEO of a major corporation, where lavish personal expenses and company-funded events were prioritized over shareholder value (Smith & Johnson, 2019). Such actions often lead to diminished stakeholder trust, decreased stock prices, and long-term financial instability (Fama & Jensen, 1983). To mitigate these conflicts, organizations utilize motivational tools like performance-based bonuses and stock options. Performance-based bonuses directly tie managerial rewards to measurable outcomes, incentivizing managers to prioritize shareholder interests (Sullivan, 2013). Stock options offer managers ownership stakes, aligning their financial gains with the company's market performance (Bebchuk & Fried, 2004). These tools are effective because they motivate managers to act in the best interest of shareholders, fostering accountability and reducing agency costs. Research indicates that aligning managerial incentives with shareholder wealth minimizes the motive for self-serving decisions that could harm the company's long-term sustainability (Jensen & Meckling, 1976). Part 2 emphasizes the importance of the time value of money (TVM) in managerial decision-making, especially in evaluating investments such as bonds. Knowledge of TVM allows managers to assess the present value of future cash flows, facilitating sound financial decisions. For example, when considering the purchase of bonds, understanding concepts like discount rates and present value helps managers determine whether th

Dr. Jack HW Helper · Accepted Answer

Please Answer Part 1 And Part 2 In 350 Word Limit In APA Format With T Part 1 of this discussion explores the divergence that can occur between stockholders' interests and management's goals. Although theoretically aligned, in practice, managers sometimes pursue personal gains, such as excessive compensation or extravagant expenditures, which may not align with shareholder wealth maximization (Jensen & Meckling, 1976). A notable example is the 2018 overspending scandal involving a CEO of a major corporation, where lavish personal expenses and company-funded events were prioritized over shareholder value (Smith & Johnson, 2019). Such actions often lead to diminished stakeholder trust, decreased stock prices, and long-term financial instability (Fama & Jensen, 1983). To mitigate these conflicts, organizations utilize motivational tools like performance-based bonuses and stock options. Performance-based bonuses directly tie managerial rewards to measurable outcomes, incentivizing managers to prioritize shareholder interests (Sullivan, 2013). Stock options offer managers ownership stakes, aligning their financial gains with the company's market performance (Bebchuk & Fried, 2004). These tools are effective because they motivate managers to act in the best interest of shareholders, fostering accountability and reducing agency costs. Research indicates that aligning managerial incentives with shareholder wealth minimizes the motive for self-serving decisions that could harm the company's long-term sustainability (Jensen & Meckling, 1976). Part 2 emphasizes the importance of the time value of money (TVM) in managerial decision-making, especially in evaluating investments such as bonds. Knowledge of TVM allows managers to assess the present value of future cash flows, facilitating sound financial decisions. For example, when considering the purchase of bonds, understanding concepts like discount rates and present value helps managers determine whether th

Please Answer Part 1 And Part 2 In 350 Word Limit In APA Format With T

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