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1. Many managers are caught in a dilemma between a desire to maximize the value of their companies and the demands of "stakeholder theory" to take into account the interests of all the stakeholders in a firm. The EMH is one way out of this seeming conflict. Do you agree? Why or why not?

2. Keep in mind that the capital funding of a company is made up of two components: debt and equity. Lenders and equity holders each expect a certain return on the funds or capital they have provided. The cost of capital is the expected return to equity owners (or shareholders) and to debt holders, so WACC tells us the return that both stakeholders - equity owners and lenders - can expect. WACC, in other words, represents the investors' opportunity cost of taking on the risk of putting money into a company. Do you agree? Why or why not? Explain.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92678537

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