FIN 650 Grand Canyon Week 1 Complete Work
FIN 650 Grand Canyon Week 1 Complete Work
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FIN 650 Grand Canyon Week 1 Discussion 1
Respond to the questions
posed in the Mini Case at the end of chapter 1 of the textbook by drafting an
e-mail to Michelle DellaTorre in which you respond to the questions. Post your
e-mail as a reply to this discussion thread. As follow up discussion, respond
to two e-mails drafted by your classmates asking any questions you may have or
for clarification of their explanations.
FIN 650 Grand Canyon Week
1 Discussion 2
This discussion thread
will be used to discuss the practice problems completed in this module. After
completing the problems, submit your answers to the instructor. Your instructor
will specify which problems will be reviewed for discussion. Post your answers
to the posted problem to this discussion thread and discuss any challenges you
had with completing the problems, tips that helped you arrive at the correct
answers, and/or questions you may still have.
FIN 650 Grand Canyon Week
1 Benchmark Case study
Corporate Governance
Over the past few years,
the number of start-up companies attracted to either doing business themselves
in the cloud, or specifically creating applications for others to use in the
cloud, has grown significantly. A few but very promising enterprises have
launched applications in “container” technology, which enables companies,
programmers, or other enterprises to both launch and run applications solely in
the cloud.
There is still a lot of
room in this emerging marketplace, and you are diving in. The product you’ve
developed has a unique angle to tap into the local-grown/local-made/local-paid
movement that’s also growing larger every day. Your initial market is your own
small city, which operates independently but which is linked economically and
via public safety provision to another small city sitting directly across a
river separating the two. Once you’ve been able to launch your company in your
city, you plan to approach the “sister city” leaders, then the county, state,
and eventually go national. It’s too soon now, but your future plans entail an
IPO offering to accomplish all this. Eventually, you hope to be able to
re-imagine your product to go global. You have big plans, are close to being
tapped out financially and you now need to plan for additional investors.
Address the following
considerations as they apply to your product launch.
- Describe an
agency relationship and how it may/will take shape for your small company.
As the sole employee and investor in your startup, what agency conflicts
might arise?
- Six months
have transpired, and you’ve been able to add two employees. In this new
arrangement, what agency disputes might now develop that need to be
addressed, and how might you address them? What resources do you need to
use or consider?
- Another
three months have passed. You are now ready to expand to your sister city
and you need more capital. You decide the wisest path is to sell some
stock to outside investors, but you will maintain control over your
company by holding onto the majority of the stock. In this new scenario,
what type of agency conflict might occur? How can you address this in advance?
- The IPO was
a success, and you have a robust number of shareholders. With board
support, you determine it is time to hire a financial manager to help your
firm achieve current goals and set new ones appropriate to the firm’s
growth strategy. What professional strengths and skills will an individual
seeking this position need to possess?
- Another
consideration you feel you need to address at this point, now that your
firm’s stock is publicly traded, is how to sustain the high ethical
standards you’ve fostered thus far as you move into the firm’s future.
What strategies can your management team implement to conduct your
business with both personal and professional integrity? What steps can you
take to ensure that ethical considerations for financial and other
management decisions are embedded into the firm’s culture?
- Congratulations
– you are now at Year One, and everything is moving along faster than you
anticipated. While this is great, you are at the point where you need to
raise additional capital from outside lenders. With this decision, what
type of agency costs might the company incur? How might a lender mitigate
any agency costs?
- Year Two
rolls around. Your company has been able to expand beyond your local
communities and into to localities and governments in half the counties of
the state. The stakes are getting bigger and you welcome the idea of
high-level input to ensure the company keeps growing and expanding. You
cash out the majority of your stock and turn the company over to an
elected board of directors. Neither you nor any other stockholders own a
controlling interest (which is also the situation at most public
companies). List six potential managerial behaviors the new board might
take that could harm your company’s value, and what steps overall can put
into place to avoid or mitigate these.
- You are also
aware from your prior career and from your research, that corporate
governance can affect shareholder value. This greatly concerns you, as you
still have lofty plans for your company’s growth and eventual global
trajectory. Questions you’ve identified that need to be addressed at this
stage include: a) What is corporate governance?; b) What five corporate
governance provisions are internal to a firm and are under its control?;
c) What characteristics of the board of directors usually lead to effective
corporate governance?; d) What characteristics of the board of directors
signal ineffective or problematic governance practices?; e) How can
regulatory agencies and legal systems affect corporate governance? If
there are differences in local versus national levels, expand upon these.
- Lastly, one
of your new board members is very concerned with “blockholders.” What is
block ownership? How does it affect corporate governance? Explain the pros
and cons.
Prepare this assignment
according to the guidelines found in the APA Style Guide, located in the
Student Success Center. An abstract is not required.
This assignment uses a
rubric. Please review the rubric prior to beginning the assignment to become
familiar with the expectations for successful completion.
You are required to submit
this assignment to Turnitin. Please refer to the directions in the Student
Success Center.
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