Reference no: EM131099178

Please answer ONE of the following: in 350 - 500 - Use a standard essay format for responses to all questions (i.e., an introduction, middle

paragraphs and conclusion).

1. One of the causes of the recent financial crisis in the United States has been excessive risk taking due to underestimation of risk. Examine how this relates to financial leverage. Can overestimation of risk also be detrimental?
2. Examine if it is possible for a company that has negative net income and negative operating cash flow to end the year with an increase in cash and an increase in stock price. Explain your answer.
3. Documents uncovered after the Exxon Valdez oil spill in Alaska revealed that Exxon could have used double-hulled oil tankers that would have prevented the spill, but the cost of refitting their fleet of single-hulled tankers was considered too high. Exxon determined that the costof cleaning up an oil spill would be less than the cost of refitting the ships, thus increasing shareholder value. Several years after the oil spill, however, Exxon was fined billions of dollars for the spill. How do the costs of the clean up and the fines pertain to a discussion of maximizing shareholder value and ethical responsibility?