Concept Questions 1. Agency Problems Who owns a corporation? Describe the process whereby the owners control the firm's management. What is the main reason that an agency relationship exists in the corporate form of organization? In this context, what kinds of problems can arise? 2. Not - for - Profit Firm Coals Suppose you were the financial manager of a not - for - profit business (a not - for - profit hospital, perhaps). What kinds of goals do you think would be appropriate? 3. Goal of the Firm Evaluate the following statement: Managers should not focus on the current stock value because doing so will lead to an overemphasis on short - term profits at the expense of long - term profits