Each post must be 225 words. $15 added to tip if you turn in tonight. Thank you Post 1- There is some evidence that firms deliberately manage earnings in advance of a major stock repurchase (buyback). Do you believe that corporate managers tend to manipulate their stock’s value prior to a buyback, or do you believe that corporations tend to initiate a buyback to enhance shareholder value? Post 2-Answer all of the following: 1. Briefly describe the agency problem that exists between owners and lenders. How do lenders cause firms to incur agency costs to resolve this problem? 2. “Information asymmetry lies at the heart of the ethical dilemma that managers, stockholders, and bondholders confront when companies initiate management buyouts or swap debt for equity.” Comment on this statement. What steps might a board of directors take to ensure that the company’s actions are ethical with regard to all parties? 3. Cash flow projections are a central component to the analysis of new investment ideas. In most firms, the person responsible for making these projections is not the same person who generated the investment idea in the first place. Why?
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