Explain the conflict of interest between shareholders and managers
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agency view of the corporation suggests that the decision rights of the corporation should be entrusted to a manager to act in shareholders' interests. Agency costs mainly occur when ownership is separated, or when managers have objectives other than shareholder value maximization.
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Agency costs mainly occur when ownership is separated, or when managers have objectives other than shareholder value maximization. ... There are various conflicts of interest that can impact manager's decisions to act in shareholders' interests. Management may, for example, buy other companies to expand power.
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