İŞLETME FİNANSI I

The shareholder value is the difference between the book value of the company and  the book value of its liabilities. Hence the shareholder value of the company is TL 800,000-TL 500,000=TL 300,000

Vertical equity agency costs stem from owners delegating managers (agents) to maximize their benefits in return of a financial return (compensation). Agency theory assumes
this relationship does not work properly because personal interests of managers sometimes do not allign with interests of shareholders.

Due to inflation, they cannot buy more goods and services with the same amount of money in the future.

The greater the perceived risk, the greaster the return required by the investors, since people need to be compensated for the additional risks they undertake.

The corporate governance approach of the Turkish Commercial Code is based on four pillars that have universal characteristics within the context of corporate governance. Those pillars are

Providing false information to investors such as overstated profits is an example of a finance-related unethical behavior, which causes the reputation of the company to detoriate.

The shareholder value based on the value of expected future cash flows adjusted for time and risk is defined as the INTRINSIC VALUE , which is in fact the present value of the future cash flows that the company expects to generate.

Total assets are TL 700,000 (TL 250,000+TL 450,000) as we add current assests and fixed assets. Since total assets equal total liabilites and owners' equity, we subtract total lianbilities from total assets to calculate owners' equity, which is TL 200,000 (TL 700,000-TL 500,000)

Corporations are founded for a reason, which is called as “main objective” in business academic jargon. Owners’ (shareholders’) main motive for taking all risks and starting up a business is assumed to beincreasing their wealth as much as possible, in technical words, maximizing wealth.

Labor is not a component of financial system.