1). Alberson Corporation and Barrington Company are of similar size and both have their headquarters in Wichita. Both companies do, about half of their business in the United States and half through their foreign subsidiaries. Alberson Corporation makes most major decisions for its foreign subsidiaries from its Wichita headquarters, while Barrington Company uses a more decentralized approach. Which of these two companies will most likely have a greater agency problem and greater agency costs? Briefly explain why.

2). The subsidiaries of Alberson Corporation from the previous question are all in Europe. The subsidiaries have earning measured in euros that they send to the parent company in Wichita four times a year. Explain how appreciation of the euro would affect the Alberson Corporation's valuation.