What is management’s primary goal?
What do investors expect to receive when they buy a share of stock?
Do investors know for sure what they will receive? Explain.
Based just on the name, which company would you regard as being
riskier, General Foods or South Seas Oil Exploration Company?
Explain.
When a company like Boeing decides to invest $5 billion in a new jet
airliner, are its managers positive about the project’s effect on
Boeing’s future profits and stock price? Explain.
Would Boeing’s managers or its stockholders be better able to judge
the effect of a new airliner on profits and the stock price? Explain.
Would all Boeing stockholders expect the same outcome from an air-
liner project, and how would these expectations affect the stock
price? Explain.
