Why should a company tie its budget to the overall goals of the company?

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there will never be any cost overruns.
it will ensure that the company will always reach its profit targets.
people will always receive their expected bonuses.
by doing so, people have clear guidance of the priorities and focus on them exclusively, while spending less time arguing about the details or insignificant items.

Which of the following statements is correct? stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns. potential conflicts between stockholders and bondholders are increased if a firm's bonds are convertible into its common stock. takeovers are most likely to be attempted if the target firm’s stock price is above its intrinsic value. one advantage of operating a business as a corporation is that stockholders can deduct their pro rata share of the taxes the firm pays, thereby eliminating the double taxation investors would face in a partnership.