| Course | FIN 330 Corporate Finance |
|---|---|
| Module | Module 1 |
| Paper type | undergraduate discussion post on the goal of the firm and agency problems |
| Length | About 370 words, 3 pages |
| Format | APA 7 student paper |
| School | Southern New Hampshire University |
| Program | BS Finance |
| Updated | October 2026 |
Free sample paper for FIN 330 Module 1
Module One Discussion
A Buyback, a New Line and the Goal of the Firm
For this course I picked a composite Nasdaq-listed maker of commercial ice machines in Fort Wayne, Indiana: $780 million of revenue, about 2,400 employees and 24 million shares trading near $40. An activist fund that bought 6 percent of the stock last spring wants a $100 million share buyback, arguing that the company sits on cash and pays managers to grow rather than to earn returns. The chief executive wants to spend $73 million building a line of compact ice machines cooled with propane, because federal limits on high-warming refrigerants are pushing restaurants and bars to replace older equipment, and the line would keep the Fort Wayne plant busy.
I think the company's goal should be the long-run value of the shares, and that this goal, properly measured, supports the investment if its expected return beats the cost of capital. Value is not the same as next quarter's earnings or this month's share price. A buyback returns cash to owners, which is right when the company has no better use for it; an investment whose net present value is above zero adds more than handing the money back.
Agency problems appear on both sides. Jensen and Meckling (1976) describe how managers who own little of the firm may spend its cash on growth that benefits them, larger empires and more security, at shareholders' expense. The activist has a point there. But a fund that plans to sell within two years may prefer a quick boost in earnings per share over an investment that pays off in year five.
The stakeholder view adds something. The Business Roundtable (2019) committed its members to serving customers, employees, suppliers and communities as well as shareholders. Edmans (2020) argues that the best companies grow the total value they create, and that investments which serve customers and employees often reward shareholders too. Here, a product that helps customers meet the new rules and keeps a plant running is likely the same choice that raises long-run value. The real test is the NPV, which this course will calculate.
When an activist and management disagree, how should a board judge which side is acting for long-term owners and which for itself?
References
Business Roundtable. (2019). Statement on the purpose of a corporation. https://www.businessroundtable.org/purposeofacorporation
Edmans, A. (2020). Grow the pie: How great companies deliver both purpose and profit. Cambridge University Press.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360. https://doi.org/10.1016/0304-405X(76)90026-X
What the FIN 330 Module 1 instructions ask for
The first FIN 330 discussion usually asks about the goal of financial management: whether firms should maximize shareholder wealth, profit or the interests of a wider group of stakeholders, and how agency problems between owners and managers arise. Some prompts ask for a current example. A strong post takes a clear position, distinguishes short-term profit or share price from long-run value, applies the idea of agency costs to a specific situation and recognizes the strongest counterargument. Avoid restating textbook definitions without applying them. If the prompt asks for a current example, choose a company whose decision is documented in news coverage or filings so classmates can check it. Keep the post focused on one decision rather than a survey of corporate scandals.
How this FIN 330 Module 1 discussion example is built
The post uses an Indiana maker of commercial ice machines with 24 million shares trading near $40. An activist fund holding 6 percent wants a $100 million buyback, arguing that management hoards cash. The chief executive wants $73 million for a propane-cooled product line, citing federal limits on high-warming refrigerants. The post argues that the firm's goal is long-run value for shareholders and that, measured properly, it usually favors investments with positive NPV. It notes agency problems on both sides: managers may build empires, and a fund may favor a quick gain. It ends by asking classmates how a board should judge which side is acting for long-term owners.
Where the FIN 330 Module 1 rubric puts the points
Grading for the opening FIN 330 discussion typically weighs a clear position on the goal of the firm, accurate use of concepts such as shareholder wealth and agency costs, application to an example, recognition of other views and responses to classmates. Strong posts distinguish value from short-term earnings or price, explain how incentives can misalign and suggest how governance can reduce the problem. Posts lose credit for defining terms without applying them, for treating stakeholders and shareholders as always opposed and for replies that only agree. Some instructors also reward posts that suggest a governance fix, such as long-term equity pay or independent directors.
FIN 330 Module 1 help: the mistakes that cost points
Many students set shareholders against stakeholders as if the firm must pick one. A more useful approach asks over what horizon value is measured, since treating employees and customers well often raises long-run value. Use one concrete decision to make the argument real. Name the agency problem precisely: who is the agent, who is the principal and what incentive pulls them apart. Then suggest a fix, such as pay tied to long-term results. In replies, test a classmate's position against a hard case. Short posts can still be strong if every sentence carries an argument. Use one source for the classic agency view and one for the stakeholder view so the debate is balanced.
Get FIN 330 Module 1 written to your instructions
Share your FIN 330 Module 1 prompt. Expect a post that picks a side on the goal of the firm, applies agency theory to one boardroom choice and closes by putting a hard case to classmates. Turnaround is roughly two days; we write the first post free. The paper above is an original model document written by our desk, not a submitted student paper and not an official Southern New Hampshire University document.
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FIN 330 Module 1 questions, answered
Where can I find a free FIN 330 Module 1 Discussion sample?
This page includes the full FIN 330 Module 1 post on the goal of the firm and agency problems in a dispute over a buyback.
What is the goal of financial management?
In most finance texts, maximizing the value of the firm for its shareholders over the long run, which differs from maximizing short-term profit or the current share price.
What is an agency problem?
A conflict that arises when agents, such as managers, act in their own interests rather than those of the principals, such as shareholders, who hired them.
What are agency costs?
The costs of monitoring managers, aligning their incentives and the value lost when managers' decisions still diverge from owners' interests.
Can a company serve both shareholders and stakeholders?
Often yes, because treating employees, customers and communities well can raise long-run value, though trade-offs remain in some decisions.