stock Holder and management interest and application of time value of money

Part 1: Stockholders and Management Interests

Stockholders and managers want the same thing, don’t they? Theoretically, yes, but in reality, it does not always work that way. Too often, managers’ personal goals compete with shareholder wealth maximization. Sometimes, managers pay themselves excessive salaries or bonuses that are at odds with the idea of shareholder wealth maximization. How many times have you seen in the news examples of CEO excesses or outlandish spending on events or things that definitely do not help the overall goal of stockholder wealth maximization?

To prepare for this Discussion, think about a time in your professional experience when a decision was made that seemed to benefit a specific manager or small group of managers and not the overall corporation. If you do not have professional experience directly related to this topic, research a situation in the news where this theme is demonstrated. Consider the outcomes of such an imbalance between manager and stockholder interests and research on how to avoid such a situation.

Describe the situation from either your professional experience or your research.

Explain two or more motivational tools that can aid in aligning stockholder and management interests.

Explain how your selected tools are effective in resolving potential conflicts among managers and stockholders.

Support your discussion with appropriate academically reviewed articles. Use APA format throughout.

Part 2: Application of Concepts/Time Value of Money

Review the video links below. Based on the materials presented in these videos, discuss how you will use the time value of money concepts in managerial decision making. Be specific and give examples based on your experience or research.

Time Value of Money: google time value of money

Bonds:

http://www.teachmefinance.com/bondvaluation.html

Requirements:

Mininum 2 references, APA format, each part should have min 250 words

Solution Preview

Question 1
A case where decisions made favored the managers at the expense of the Corporation
It is certain that stockholders are very crucial persons in every Company or Corporation. These are the people who have invested their money in the Company through the purchase of shares. The goals of the management and the shareholders in every Company is to maximize the profits as they reduce the costs. However, in some cases, the management misuse the resources of the Company which may result in conflict (Masulis, Wang & Xie, 2017). For example, the management may organize trips using the shareholder’s wealth or raise their salaries at the expense of the interests of the Corporation. This happened in a certain Company where I worked. The management organized trips to China using the shareholders’ funds in the name of benchmarking.

(827 words)