The principal-agent problem of ownership versus control of the corporation arises when owners and managers Select...
The principal-agent problem of ownership versus control of the corporation arises when owners and managers
Select one:
a. are the same people.
b. pursue objectives that differ from those their customers wish them to pursue.
c. pursue objectives that differ from those their workers wish them to pursue.
d. pursue objectives that differ from those the government wishes them to pursue.
e. pursue different objectives.
Homework Answers
Answer
Option e
e. pursue different objectives.
The manager objective and the ownership objectives are different as the salaries or wages may depend on the revenue, but the owner wants to maximize profits, so there is a different objective between manager and ownership of profit vs. revenue maximization.
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The principal-agent problem of ownership versus control of the
corporation arises when owners and managers
Select...
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A common problem facing any business entity is the debt versus equity decision. When funds are...
A common problem facing any business entity is the debt versus
equity decision. When funds are required to obtain assets, should
debt or equity financing be used? This decision also is faced when
a company is initially formed. What will be the mix of debt versus
equity in the initial capital structure? The characteristics of
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implications of using one method of financing as opposed to the
other.
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debt or equity financing be used? This decision also is faced when
a company is initially formed. What will be the mix of debt versus
equity in the initial capital structure? The characteristics of
debt are very different from those of equity as are the financial
implications of using one method of financing as opposed to the
other.
Cherokee...
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