Question 3 (21 MARKS)

1. Define agency relationship. Briefly describe agency problems, agency costs and incentives do managers in large corporations have to maximise share value.
   6. marks)

(CLO1:PLO2:C2) (CLO1:PLO2:C2)

2. Differentiate between leasing and financing.
   6. marks)

(CLO3:PLO2:C4) (CLO3:PLO2:C4)

3. Briefly discuss THREE (3) types of financial management decisions. For each type of decision, give an example of a business transaction that would be relevant.

(9 marks)

(CLO1:PLO2:C2) (CLO1:PLO2:C2)