Description
The purpose of this assignment is to explain core concepts related to corporate valuation and governance and to identify strategies for conducting business with personal and professional integrity.Read the Chapter 13 Mini Case in Financial Management: Theory and Practice. Complete Parts 1 and 2.Part 1: Using complete sentences and academic vocabulary, please answer questions a through d.Part 2: Using the mini case information, write a 250-500-word letter of intent discussing specific strategies for how you will conduct your start-up business with personal and professional integrity.While APA style is not required for the body of this assignment, solid academic writing is expected, and documentation of sources should be presented using APA formatting guidelines.
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Benchmark – Mini Case 2 – Rubric
Question A
4.5 points
Criteria Description
Question A
5. Target
4.5 points
Answer is thorough.
4. Acceptable
3.92 points
Answer is detailed.
3. Approaching
3.56 points
Answer is present.
2. Insufficient
3.33 points
Answer is present but lacks detail or is incomplete.
1. Unsatisfactory
0 points
Answer is not present.
Question B
4.5 points
Criteria Description
Question B
5. Target
4.5 points
Answer is thorough.
4. Acceptable
3.92 points
Answer is detailed.
3. Approaching
Answer is present.
3.56 points
2. Insufficient
3.33 points
Answer is present but lacks detail or is incomplete.
1. Unsatisfactory
0 points
Answer is not present.
Question C
4.5 points
Criteria Description
Question C
5. Target
4.5 points
Answer is thorough.
4. Acceptable
3.92 points
Answer is detailed.
3. Approaching
3.56 points
Answer is present.
2. Insufficient
3.33 points
Answer is present but lacks detail or is incomplete.
1. Unsatisfactory
0 points
Answer is not present.
Question D
4.5 points
Criteria Description
Question D
5. Target
4.5 points
Answer is thorough.
4. Acceptable
Answer is detailed.
3.92 points
3. Approaching
3.56 points
Answer is present.
2. Insufficient
3.33 points
Answer is present but lacks detail or is incomplete.
1. Unsatisfactory
0 points
Answer is not present.
Letter of Intent (B)
9 points
Criteria Description
Letter of Intent (B) Students use a case study to compose a letter of intent discussing
specific strategies for how you will conduct your start-up business with personal and
professional integrity. (C10.4/4.4)
5. Target
9 points
Letter of intent discussing specific strategies for conducting business with personal
and professional integrity is thorough.
4. Acceptable
7.83 points
Letter of intent discussing specific strategies for conducting business with personal
and professional integrity is detailed.
3. Approaching
7.11 points
Letter of intent discussing specific strategies for conducting business with personal
and professional integrity is present.
2. Insufficient
6.66 points
Letter of intent discussing specific strategies for conducting business with personal
and professional integrity is present but lacks detail or is incomplete.
Mechanics of Writing
3 points
Criteria Description
(includes spelling, punctuation, grammar, language use)
3 points
5. Target
Writer is clearly in command of standard, written, academic English.
4. Acceptable
2.61 points
Prose is largely free of mechanical errors, although a few may be present. The
writer uses a variety of effective sentence structures and figures of speech.
3. Approaching
2.37 points
Some mechanical errors or typos are present, but they are not overly distracting to
the reader. Correct and varied sentence structure and audience-appropriate
language are employed.
2. Insufficient
2.22 points
Frequent and repetitive mechanical errors distract the reader. Inconsistencies in
language choice (register) or word choice are present. Sentence structure is correct
but not varied.
1. Unsatisfactory
0 points
Total 30 points
10/16/23, 1:15 PM
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Chapter 13: Corporate Governance Mini Case
Book Title: Financial Management: Theory and Practice
Printed By: Alla Khachatryan (AKhachatry1@my.gcu.edu)
© 2020 Cengage Learning, Cengage Learning
Chapter Review
Mini Case
Suppose you decide (as did Steve Jobs and Mark Zuckerberg) to start a company. Your
product is a software platform that integrates a wide range of media devices, including
laptop computers, desktop computers, digital video recorders, and cell phones. Your initial
market is the student body at your university. Once you have established your company and
set up procedures for operating it, you plan to expand to other colleges in the area and
eventually to go nationwide. At some point, hopefully sooner rather than later, you plan to go
public with an IPO and then to buy a yacht and take off for the South Pacific to indulge in
your passion for underwater photography. With these issues in mind, you need to answer for
yourself, and potential investors, the following questions.
a. What is an agency relationship? When you first begin operations, assuming
you are the only employee and only your money is invested in the business,
would any agency conflicts exist? Explain your answer.
b. If you expanded and hired additional people to help you, might that give rise to
agency problems?
c. Suppose you need additional capital to expand, and you sell some stock to
outside investors. If you maintain enough stock to control the company, what
type of agency conflict might occur?
d. Suppose your company raises funds from outside lenders. What type of
agency costs might occur? How might lenders mitigate the agency costs?
e. Suppose your company is very successful, and you cash out most of your
stock and turn the company over to an elected board of directors. Neither you
nor any other stockholders own a controlling interest (this is the situation at
most public companies). List six potential managerial behaviors that can harm
a firm’s value.
f. What is corporate governance? List five corporate governance provisions that
are internal to a firm and under its control.
g. What characteristics of the board of directors usually lead to effective
corporate governance?
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