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Chapter 1: The Role of Financial Management
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 Exercise 1.1  Shareholders versus Stakeholders

Read "The Governing Corporate Objective: Shareholders Versus Stakeholders" by James M. McTaggart, chairman and president of Marakon Associates.

Q. Who are stakeholders? According to Mr. McTaggart, is the firm better off favoring a particular stakeholder group over another? Why? Do you agree? Explain.



 Exercise 1.2  The Goal of the Firm

In the text, the first end-of-chapter question asks -- If all companies had an objective of maximizing shareholder wealth, would people overall tend to be better or worse off? Now, read "Why Share-Owner Value?" by Roberto Goizuetta, former CEO of The Coca-Cola Company.

Q.How do you think Mr. Goizuetta would have answered that first end-of-chapter question? Do you agree?



 Exercise 1.3  What Companies Say About Their Corporate Goal

In the "Goal of the Firm" section in Chapter 1, you will find the corporate goal statements for a number major corporations as found in their past annual reports, e.g., Campbell Soup Company, The Coca-Cola Company, Equifax, and Georgia-Pacific.

The following web sites will help you locate online and/or paper copies of many current and recent annual reports: AnnualReports.com and Public Register's Annual Report Service (PRARS).

Q.Using one or more of the suggested web sites, see how many more recent annual reports you can find for the companies mentioned in the textbook. In how many cases have the goal statements remained virtually intact? (TIP: Goal statements are often found in the "Letter to Shareholders" section of a firm's annual report.) If a company's goal statement has changed, how does it now read? What is your reaction to any new goal statement(s)?



 Exercise 1.4 Career Opportunities in Financial Management

You decide to do a little research on career opportunities and salaries in finance -- with special emphasis on financial management or, as it is sometimes called, corporate finance. Begin by visiting monsterTRAK.com and Robert Half.

Q.What specific career opportunities (i.e., job areas) are available for those with financial management skills? What does the salary situation look like?


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