1. ANALYZE In the Friendly case, the board of directors (BOD) is the main direct stakeholders influencing the corporate governance. Obviously, we can see that Smith as the chairman and CEO of both Friendly and The Restaurant Company (TRC). Smith had 70% shares of TRC and 10% shares of the Friendly Company. However, Smith did not improve the effectiveness of the BOD and regardless of the shareholders’ interests in Friendly. As the top management team in Friendly， Smith and the other four persons in
YIFEI XIAO CASE#4 ASSIGNMNET 1. ANALYZE In the Friendly case, the board of directors (BOD) is the main direct stakeholders influencing the corporate governance. We can see that Smith as the chairman and CEO of both Friendly and The Restaurant Company (TRC). However, Smith did not improve the effectiveness of the BOD and regardless of the shareholders’ interests in Friendly. The leadership is not clear and terrible. As the top management team in Friendly Smith and the other four persons in BOD plan
its profits. Every set of published accounts is based on books which have been gently cooked or completely roasted. The figures which are fed twice a year to the investing public have all been changed in order to protect the guilty. It is the biggest con trick since the Trojan horse. . . In fact this deception is all in perfectly good taste. It is totally legitimate. It is creative accounting”.
differences’. Trusting the management of the daughter companies blindly, the lack of attention and complete mismanagement and fraud in Germany led to the biggest bankruptcy in Dutch History. When a company mergers over the border it looks at the global corporate strategies. There are four different strategies each one with its own pros and cons. One of those strategies is the Globalization strategy. In this strategy an organization assumes that a single global market exists. A perfect example is Subway
The trade-off theory came into existence after the propositions of Modigliani and Miller and it was proposed by Kraus and Litzenberger in 1973. During the 60s, the trade-off theory was commonly recognized as the static trade-off theory. It states that a company chooses the amount of debt and the amount of equity to use to finance its operations by balancing the benefits and the costs. Obviously, the main purpose of the trade-off theory is to explain the fact that firms are partly financed with debt
important factors or components, namely Revenues and Expenditures Revenues: funds that will be raised. • The types of funds raised depend on who is collecting these funds. • A government collects for example: Taxes (e.g. individual, corporate, social security, fuel) or Special taxes on certain products (e.g. tobacco, alcohol, etc) Expenditures: funds that will be spent on various projects and