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Shareholders are the owners of a corporation, yet they do not manage the firm. This results in a principal-agent problem. The firm's managers (agents) are
Shareholders are the owners of a corporation, yet they do not manage the firm. This results in a principal-agent problem. The firm's managers (agents) are expected to act in the interest of the firm's shareholders (principals). When might interest not align? Can you provide a specific example?
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