What types of risks should shareholder wealth-maximizing managers seek to offset in a firm they are...
What types of risks should shareholder wealth-maximizing managers seek to offset in a firm they are managing? Why? 2. How can patents, copyrights, and legal challenges be used to manage business risk?
Homework Answers
The following risks should wealth maximizing managers seek to offset:-
1.) Liquidity risk - the risk of not selling your investments at a fair price.
2.) Credit Risk - the risk of not getting money back from the debtor in events like bankruptcy.
3.) Macro economic factors - interest rate risks, foreign exchange risks, growth rate risks etc.
4.) Concentration risk - the risk that your investments are only in 1 type of security
Patents, copyrights and legal challenges can be used to manage business risk in a way they can be applied for sustainable growth in future by reducing competition. By applying a patent,.the competitors wont be aboe to copy your product/ service and help you to oast in long tun and increase profits
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What types of risks should shareholder wealth-maximizing
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