Assignment: Keep the answers short and precise (3-4 sentences max). You might not find all the answers in lecture or book. Googling the unknown terms will be very useful. 1. What is agency conflict? Describe how the conflict arises between stockholders and managers, and between stockholders and debtholders. 2. Describe the condition for stock market efficiency. Can an investor "beat the market" if the market is efficient? 3. Brown Cow Co. are famous for its chocolate milk production facilities. They already have a major share of the chocolate milk market and they cannot expand their business in chocolate milk anymore. One of their geniuses believes that tech market is the future and proposed expansion in tech market using their excess money. Do you agree with the genius? Explain your reason for agreement, or disagreement. Can you come up with a better use of the excess free cash flow? 4. (True/False. Explain) All unethical business practices are illegal. 5. Can off-balance sheet items undermine firm evaluation based on financial ratios? If yes, how? If no, why