Foundations Of Finance
Foundations Of Finance
10th Edition
ISBN: 9780134897264
Author: KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher: Pearson,
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Chapter 1, Problem 4RQ

What is the agency problem, and how might it impact the goal of maximization of shareholder wealth?

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What is meant by the goal of maximization of shareholder wealth?
Why should shareholder wealth maximization be the overriding objective of the management?
How to encourage the managers to act in a way which is consistent with the objective of maximization of shareholder wealth?
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