Objective of shareholder wealth maximisation

Assignment Help Business Economics
Reference no: EM133080695

Following the financial crisis, many governments 'bailed out' their country's banks by buying bank shares. For example, in November 2008, the UK Government spent £45bn buying a 58% stake in RBS ordinary shares alongside a tranche of preference shares. In April 2009 the preference shares were converted into ordinary shares and the Government's ordinary shareholding in RBS now stands at 65%. Including the Governments acquisition of B shares in December 2009, the total economic ownership of RBS group by the UK Government currently stands at 81%. (RBS, 2013)

Based on your understanding of agency problems outlined in your pre-reading, how would you characterise the current ownership structure of RBS? Is the current ownership structure consistent with the objective of shareholder wealth maximisation?

Reference no: EM133080695

Questions Cloud

Suppose both firms choose prices simultaneously : Suppose that Ericsson and Nokia are the two primary competitors in the market for 4G handsets. Each firm must decide between possible price levels: $100 and $90
What the necessary Bad Debts adjusting entry on December : Using the aging of accounts receivable method, it is estimated that $17,000 of the December 31, 2020, What the necessary Bad Debts adjusting entry on December
Why is packet switching so essential to the internet : Why is packet switching so essential to the Internet?
Calculate the net profit or loss of the business : The key chains sell for RM4.60 each. For the financial year 2018, CK Sdn Bhd manages to sell 14,000 key chains. Calculate the net profit or loss of the business
Objective of shareholder wealth maximisation : Based on your understanding of agency problems outlined in your pre-reading, how would you characterise the current ownership structure of RBS?
Bigger effect on the price of land : Consider the problem of manufacturing generic drugs in India. They can sell as much as they want at the market price. Suppose also that all industrial businesse
What is the company break-even sales in dollars : The company has no beginning or ending inventories. The company produced and sold 10,000 units last month. What is the company's break-even sales in dollars
Promoting and fostering diversification initiatives : Describe your organization's motivations and resources for promoting and fostering diversification initiatives, as well as how diversification tactics
What is the cost of right of use asset : Annual rental payable at the end of each year 450,000; residual value guarantee 50,000; What is the cost of right of use asset

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd