Agency Theory. Identify principals and agents in the cases mentioned below. Describe the contributions and “prices” associated with these relationships, identify potential risks for the principal and give suggestions for limiting these risks.

A. The Pasadena Bank lends money to the Alhambra Construction Company.

B. Employee Mario Auditorio considers leaving his current job and starting a new career with Isitituto Milanese.

C. Manager Yu-Chang receives an annual bonus, based on last year’s profit of company Shang-Zu.
D. Supplier “Vite et Juste” delivers goods to company “Merci.” Payment is due 60 days after the date of the invoice.