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Please explain the agency problem between shareholders and managers in corporate finance and how compensation plan,...

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Finance

Please explain the agency problem between shareholders andmanagers in corporate finance and how compensation plan, board ofdirectors and takeovers can possibly mitigate the problem.

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Agency problem arises due to conflict of interest between promoters of company or stockholdersand the management The conflict arises due to interest of stockholder to maximize their own wealth whereas interest of manager will be to increase their    See Answer
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Please explain the agency problem between shareholders andmanagers in corporate finance and how compensation plan, board ofdirectors and takeovers can possibly mitigate the problem.

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