Answer the following: a) Explain the main reason that an agency relationship exists in the company form of business? What kind of problems can arise? (5 marks) b) Why is the goal of financial management to maximise the current value of the companys stock? In other words, why isnt the goal to maximise the future value? (5 marks)

c) Discuss how company shareholders can encourage their managers to act in a way which is consistent with the objective of shareholder wealth maximisation (5 marks)