Ross et al.: Fundamentals
of Corporate Finance, Sixth
Edition, Alternate EditionI. Overview of Corporate
Finance- Introduction to Corporate
Finance
(^48) © The McGraw−Hill
Companies, 2002
Conclusion The available theory and evidence are consistent with the view that
stockholders control the firm and that stockholder wealth maximization is the relevant
goal of the corporation. Even so, there will undoubtedly be times when management
goals are pursued at the expense of the stockholders, at least temporarily.
Stakeholders
Our discussion thus far implies that management and stockholders are the only parties
with an interest in the firm’s decisions. This is an oversimplification, of course. Em-
ployees, customers, suppliers, and even the government all have a financial interest in
the firm.
Taken together, these various groups are called stakeholdersin the firm. In general,
a stakeholder is someone other than a stockholder or creditor who potentially has a
claim on the cash flows of the firm. Such groups will also attempt to exert control over
the firm, perhaps to the detriment of the owners.
16 PART ONE Overview of Corporate Finance
The Web is a great placeto learn more about individual compa-
nies, and there are a slew of sites available to help you. Try pointing your
web browser to finance.yahoo.com. Once you get there, you should see
something like this on the page:
To look up a company, you must know its “ticker symbol” (or just ticker for short),
which is a unique one-to-four-letter identifier. You can click on the “Symbol Lookup”
link and type in the company’s name to find the ticker. For example, we typed in
“PZZA,” which is the ticker for pizza-maker Papa John’s. Here is a portion of what
we got:
There’s a lot of information here and a lot of links for you to explore, so have at it. By
the end of the term, we hope it all makes sense to you!
Work the Web
stakeholder
Someone other than a
stockholder or creditor
who potentially has a
claim on the cash flows
of the firm.