Agency Theory/Conflict

KSh 50.00

An agency problem is a conflict of interest inherent in any relationship where one party is expected to act in another’s best interests. For example, the manager, acting as the agent for the shareholders, is supposed to make decisions that will maximize shareholder wealth even though it is in the manager’s best interest to maximize their own wealth. This notes examine the various manifestations of the agency conflict and how it is resolved in corporate finance.

Category:

Description

Description:  

  • Difficult in achieving shareholder value maximization?
  • The requirement for Corporate Social Responsibility
  • Agency conflict/problem
  • Agency Conflict between:
  • Shareholders and management
  • Shareholders and creditors
  • Shareholders and the government
  • Shareholders and auditors
  • Head office and Subsidiary
  • Resolution of the Agency Conflict between:
  • Shareholders and management
  • Shareholders and creditors
  • Shareholders and the government
  • Shareholders and auditors
  • Head office and Subsidiary

Level: 

Undergraduate and Professional Level Examinations like CPA, CFA, CIFA and ACCA.

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