Suppose you decide (as did Steve Jobs and Mark Zuckerberg) to start a company. Y

Question

Suppose you decide (as did Steve Jobs and Mark Zuckerberg) to start a company. Your product is a software platform that integrates a wide range of media devices, including laptop computers, desktop computers, digital video recorders, and cell phones. Your initial market is the student body at your university. Once you have established your company and set up procedures for operating it, you plan to expand to other colleges in the area and eventually to go nationwide. At some point, hopefully sooner rather than later, you plan to go public with an IPO and then to buy a yacht and take off for the South Pacific to indulge in your passion for underwater photography. With these issues in mind, you need to answer for yourself, and potential investors, the following questions.

Answer the below

a.List three provisions in the corporate charter that affect takeovers.

b.Briefly describe the use of stock options in a compensation plan. What are some potential problems with stock options as a form of compensation?

c.What is block ownership? How does it affect corporate governance?

d.Briefly explain how regulatory agencies and legal systems affect corporate governance.

*****No plagiarism Please***** Use website to write in your own words.

thanks.

Explanation / Answer

(a) The three provisions in the corporate charter that affects takeover are:

(b) The use of stock option in a compensation plan is as follows:

The problems with stock options are:

(c) Block ownership refers to the situation when any investor from outside the organization owns large amount of company's shares. The owners who own the shares are termed as Block Holders.

Block ownership affects the corporate governance in a positive manner. The block holders keep a check on the managers and monitors their actions from time to time. They make sure that the management is fulfilling its tasks effectively and adhering to the rules and regulations. As a result the management performs ethically and thus maintaining corporate governance.     

(d) Regulatory agency and legal system affect corporate governance in number of ways:

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