Q Ch11-Discussion Questions 1. How prevalent has the agency problem been in corporate America during the last decade? During the late 1990s, there was a boom in ini- tial public offerings of Internet companies (dot. com companies). The boom was supported by sky-high valuations, often assigned to Internet start-ups that had no revenues or earnings. The boom came to an abrupt end in 2001, when the NASDAQ stock market collapsed, losing almost 80% of its value. Who do you think benefited most from this boom: investors (stock- holders) in those companies, managers, or investment bankers? 2. Why is maximizing ROIC consistent with maximizing returns to stockholders? 3. How might a company configure its strategy- making processes to reduce the probability that managers will pursue their own self-interest at the expense of stockholders? 4. In a public corporation, should the CEO of the company also be allowed to be the chairman of the board (as allowed for by the current law)? What problems might this present? 5. Under what conditions is it ethically defensible to outsource production to companies in the developing world that have much lower labor costs when such actions involve laying off long-term employees in the firm’s home country? 6. Is it ethical for a firm faced with a labor shortage to employ illegal immigrants to meet its needs?