HU Corporate Governance Essay

Question Description

I’m working on a article writing multi-part question and need an explanation and answer to help me learn.

A small company, Stevens Textile Co. is expanding its operations and needs additional financing to support its expansion projects. The company is planning to change its business registration from a limited liability company to a corporation. As a corporation it will be listed on the stock exchange market and sell shares to the public to raise capital from investors. The business will be managed by professional executives who are not owners of the corporation. The company will appoint CEO and agrees to pay him $1.2 million in cash and over $25 million in stocks and options. Potential shareholders have reacted angrily to these proposals and are very likely to vote against the proposed compensation plans. The shareholders believe that the company has experienced losses over the years and agreeing to such a compensation plan will not be in the best interests of shareholders.1. Explain agency relationship and agency costs to the owners of Stevens Textile Co.2. Suppose Stevens Textile company is very successful and the founders’ cash out most of their stock and turn the company over to an elected board of directors. Neither the founders nor any other stockholders own a controlling interest (this is the situation in most public companies). List six potential managerial behaviors that can harm a firm’s value.3. What is corporate governance? List five corporate governance provisions that are internal to a firm and under its control.4. Identify three external factors outside the firm’s control that can be used to improve corporate governance and the firm value.5. Identify five characteristics of the board of directors that usually lead to effective corporate governance.6. Explain the following terms: i. Greenmail ii. poison pills iii. restricted voting rights7. Briefly describe the use of stock options in the proposed compensation plan.8. What are some potential problems with stock options as a form of compensation.



^{Have a similar assignment? "Place an order for your assignment and have exceptional work written by our team of experts, guaranteeing you A results."}

Our Service Charter

1. Professional & Expert Writers: Eminence Papers only hires the best. Our writers are specially selected and recruited, after which they undergo further training to perfect their skills for specialization purposes. Moreover, our writers are holders of masters and Ph.D. degrees. They have impressive academic records, besides being native English speakers.

2. Top Quality Papers: Our customers are always guaranteed of papers that exceed their expectations. All our writers have +5 years of experience. This implies that all papers are written by individuals who are experts in their fields. In addition, the quality team reviews all the papers before sending them to the customers.

3. Plagiarism-Free Papers: All papers provided by Eminence Papers are written from scratch. Appropriate referencing and citation of key information are followed. Plagiarism checkers are used by the Quality assurance team and our editors just to double-check that there are no instances of plagiarism.

4. Timely Delivery: Time wasted is equivalent to a failed dedication and commitment. Eminence Papers are known for the timely delivery of any pending customer orders. Customers are well informed of the progress of their papers to ensure they keep track of what the writer is providing before the final draft is sent for grading.

5. Affordable Prices: Our prices are fairly structured to fit in all groups. Any customer willing to place their assignments with us can do so at very affordable prices. In addition, our customers enjoy regular discounts and bonuses.

6. 24/7 Customer Support: At Eminence Papers, we have put in place a team of experts who answer all customer inquiries promptly. The best part is the ever-availability of the team. Customers can make inquiries anytime.