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An investor is convinced that a corporation has a potential competitive advantage in its market sector and a capacity to realize this advantage. Nevertheless, she

  1. An investor is convinced that a corporation has a potential competitive advantage in its market sector and a capacity to realize this advantage. Nevertheless, she is concerned that corporate management may choose to pursue a less risky strategy and not to fully realize the potential of the firm. Discuss the difficulty faced by this investor. Are you aware of any arrangements which might better align the interests of this investor and management? Describe and evaluate such arrangements.

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