For a multinational company to address the agency problem between shareholders and managers, the company can give (partial) ownership to the managers. The below graph shows the relationship between managerial ownership and firm value. In this graph, X, Y, and Z represent Managerial ownership (\%) alignment, entrenchment, alignment. increase, decrease, increase of development. agency costs of debt and equity. entrenchment, alignment, entrenchment. misalignment and alignment