Agency problems are inevitable. That is, we can never expect managers to give 100% weight to shareholders

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Agency problems are inevitable. That is, we can never expect managers to give 100% weight to shareholders’ interests and none to their own.

a. Why not?

b. List the mechanisms that are used around the world to keep agency problems under control.

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Principles of Corporate Finance

ISBN: 978-0077404895

10th Edition

Authors: Richard A. Brealey, Stewart C. Myers, Franklin Allen

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Question Posted: Dec 31, 2012 10:03 AM

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Agency problems are inevitable. That is, we can never expect managers to give 100% weight to shareholders

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a While it is true that managers have a fiduciary duty to sha...View the full answer

Principles of Corporate Finance

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