CFIN
6th Edition
ISBN: 9780357144039
Author: BESLEY
Publisher: CENGAGE L
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Chapter 1, Problem 6PROB
Summary Introduction
To determine: What are some actions that stockholders can take to ensure that interests of management and stockholders coincide.
Shareholders authorize managers or executives to make critical decisions pertaining to the firm on their behalf. Stockholders expect these decisions to be consistent with their goal of wealth maximization but sometimes interests of managers conflict with goals of stockholders and that results in agency problem i.e. problem between stockholders (principals) and managers (agents).
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What are some actions stockholders can take to ensure that management’s interests and the interests of stockholders coincide? What are some other factors that influence management’s actions?
What are some actions stockholders can take to ensure that management’s interests and the interests of stockholders coincide?
What are some actions that stockholders can take to ensure that management’s and stockholders’ interests are aligned?
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