Problem Set 1
In Sweden, firms that fail to meet their debt obligations are immediately auctioned off to the highest bidder. (There is no reorganization through Chapter 11 bankruptcy.) The current managers are often the high bidders for the company. Why?
This is to be in narrative form. Bullet points should not to be used. The paper should be at least 1.5 – 2 pages in length,
Problem Set 2
Describe an adverse selection problem a company is facing. What is the source of the asymmetric information? Who is the less informed party? What transactions are not being consummated as a result of the information? Could you (or do you) use signaling or screening to consummate these transactions? Offer your company some sound advice, complete with computations of the attendant profit consequences.
This is to be in narrative form. Bullet points should not to be used. The paper should be at least 1.5 – 2 pages in length.
Problem Set 3
Discuss a division or subunit of your organization and how it is evaluated (revenue center, profit center, cost center, etc.). How does the evaluation scheme affect performance? If it is optimal, explain why. Otherwise, explain why you think it is suboptimal, and recommend what you would do if you were free to change it. Compute the profit consequences of the change.
This is to be in narrative form. Bullet points should not to be used. The paper should be at least 1.5 – 2 pages in length,
