3 . For a firm to create value it must : avoid the issuance of debt securities . have a greater cash inflow from its stockholders than its outflow to them . avoid payments to the government so dividends can be increased . 3 .( Set 2 ) A stakeholder is any person or entity : owning shares of stock of a corporation . to whom the firm currently owes money .
that initially started a firm and currently has management control over that firm .
owning bonds or other long-term debt issued by a corporation .
other than a stockholder or creditor who potentially has a financial interest in the firm . 4 . If a firm is currently profitable , then :
its cash flows are known with certainty . its reported sales exceed its costs . the timing of the cash flows on proposed projects is irrelevant . it will always have sufficient cash to pay its bills in a timely manner . its current cash inflows must exceed its current cash outflows .
4 .( Set 2 ) Which one of these best fits the description of an agency cost ? increasing the dividend payments per share