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anagerial goals may be different from shareholder goals ? Expensive perquisites ? Survival ? Independence ? Increased growth and size are not necessarily equivalent to increased shareholder wealth 117 Managing Managers ?Managerial pensation ?Incentives can be used to align management and stockholder interests ?The incentives need to be structured carefully to make sure that they achieve their intended goal ?Corporate control ?The threat of a takeover may result in better management ?Other stakeholders 118 Regulation ? The Securities Act of 1933 and the Securities Exchange Act of 1934 ? Issuance of Securities (1933) ? Creation of SEC and reporting requirements (1934) ? SarbanesOxley (“Sarbox”) ? Increased reporting requirements and responsibility of corporate directors 119 Quick Quiz ?What are the three basic questions Financial Managers must answer? ?What are the three major forms of business anization? ?What is the goal of financial management? ?What are agency problems, and why do they exist within a corporation? ?What major regulations impact public firms?