Essentials of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Essentials of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
9th Edition
ISBN: 9781259277214
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Bradford D Jordan Professor
Publisher: McGraw-Hill Education
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Chapter 1, Problem 1.13CTCR
Summary Introduction

To critically think about: The agency problems in many countries like Country G, Country J than in Country U.

Introduction:

Agency problem arises due to the likelihood of conflicts of interests between the stockholders and the management of a firm.

Statement:

The corporate ownership differs around the world. In Country U the individuals have owned the majority of the share in public companies. The large financial institution, banks, and other companies own their majority of stocks in public companies in Country J and Country G.

Summary Introduction

To critically think about: The implications for corporate control and agency problems.

Introduction:

Agency problem arises due to the likelihood of conflicts of interests between the stockholders and the management of a firm.

Statement:

Over the last few years, the large financial institutions like pension funds and mutual funds are becoming the dominant owners of the stock in Country U. These institutions also tend to be active in the corporate affairs.

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