a recent board meeting of Daruga Co, a non-executive director suggested that the company's renumeration committee should consider scrapping the company's share option scheme, since the executives could be rewarded by the scheme even when they do not perform well. A second non-executive director had a view that, even when the executives act in ways which decreases the agency problem, they might not be rewarded by the share option scheme if the stock markets were in decline. Required a) Explain the nature of the agency problem and discuss the use of share option schemes and performance related pay as methods of reducing the agency problem in a stock market listed company. b) In relation to the financial management of a company, what is the best definition of a firm's primary financial objective? c) Financial management classifies objectives of the firm into financial objectives and qualitative objectives. What are these financial