• You are the CEO of a company and you are considering entering into an agreement to have your company buy another company. You think the price might b too high, but you will be the CEO of the combines, much bigger company. You know that when the company gets bigger, your pay and prestige will increase. What is the nature of the agency conflict here and how is it related to ethical considerations? (5 marks)
• Corporate managers work for the owners of the corporation. Consequently, they should make decisions that are in the interests of the owners, rather tan in their own interests. What strategies are available to shareholders to help ensure that managers are motivated to act this way? (5 marks)