Possible agency conflict between managers/ inside owners and outside shareholders.

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Answer 1

Question

Chapter 10, Problem 2Q

Summary Introduction

To discuss: Possible agency conflict between managers/ inside owners and outside shareholders.

Expert Solution & Answer

Explanation of Solution

Managers or owners benefit from better wealth due to ownership, but they also enjoy the perks they consume, including lavish offices, golf club memberships and vacations. If the owner or manager is the only manger, then the owner/supervisor bears full price of the perks.

But if the owner/ supervisor only own a part of the company, the manager reaps all the advantages of the perks however the cost is shared by external shareholders. Potential buyers know this might happen, so that they pay much less for a minority interest in a company.

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Answer 2

Question

Chapter 10, Problem 2Q

Summary Introduction

To discuss: Possible agency conflict between managers/ inside owners and outside shareholders.

Expert Solution & Answer

Explanation of Solution

Managers or owners benefit from better wealth due to ownership, but they also enjoy the perks they consume, including lavish offices, golf club memberships and vacations. If the owner or manager is the only manger, then the owner/supervisor bears full price of the perks.

But if the owner/ supervisor only own a part of the company, the manager reaps all the advantages of the perks however the cost is shared by external shareholders. Potential buyers know this might happen, so that they pay much less for a minority interest in a company.

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Answer 3

Question

Chapter 10, Problem 2Q

Summary Introduction

To discuss: Possible agency conflict between managers/ inside owners and outside shareholders.

Expert Solution & Answer

Explanation of Solution

Managers or owners benefit from better wealth due to ownership, but they also enjoy the perks they consume, including lavish offices, golf club memberships and vacations. If the owner or manager is the only manger, then the owner/supervisor bears full price of the perks.

But if the owner/ supervisor only own a part of the company, the manager reaps all the advantages of the perks however the cost is shared by external shareholders. Potential buyers know this might happen, so that they pay much less for a minority interest in a company.

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Answer 4

Question

Chapter 10, Problem 2Q

Summary Introduction

To discuss: Possible agency conflict between managers/ inside owners and outside shareholders.

Expert Solution & Answer

Explanation of Solution

Managers or owners benefit from better wealth due to ownership, but they also enjoy the perks they consume, including lavish offices, golf club memberships and vacations. If the owner or manager is the only manger, then the owner/supervisor bears full price of the perks.

But if the owner/ supervisor only own a part of the company, the manager reaps all the advantages of the perks however the cost is shared by external shareholders. Potential buyers know this might happen, so that they pay much less for a minority interest in a company.

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Answer 5

Chapter 10, Problem 2Q

Summary Introduction

To discuss: Possible agency conflict between managers/ inside owners and outside shareholders.

Expert Solution & Answer

Explanation of Solution

Managers or owners benefit from better wealth due to ownership, but they also enjoy the perks they consume, including lavish offices, golf club memberships and vacations. If the owner or manager is the only manger, then the owner/supervisor bears full price of the perks.

But if the owner/ supervisor only own a part of the company, the manager reaps all the advantages of the perks however the cost is shared by external shareholders. Potential buyers know this might happen, so that they pay much less for a minority interest in a company.

Answer 6

Chapter 10, Problem 2Q

Summary Introduction

To discuss: Possible agency conflict between managers/ inside owners and outside shareholders.

Expert Solution & Answer

Explanation of Solution

Managers or owners benefit from better wealth due to ownership, but they also enjoy the perks they consume, including lavish offices, golf club memberships and vacations. If the owner or manager is the only manger, then the owner/supervisor bears full price of the perks.

But if the owner/ supervisor only own a part of the company, the manager reaps all the advantages of the perks however the cost is shared by external shareholders. Potential buyers know this might happen, so that they pay much less for a minority interest in a company.

Answer 7

Chapter 10, Problem 2Q

Summary Introduction

To discuss: Possible agency conflict between managers/ inside owners and outside shareholders.

Answer 8

Expert Solution & Answer

Explanation of Solution

Managers or owners benefit from better wealth due to ownership, but they also enjoy the perks they consume, including lavish offices, golf club memberships and vacations. If the owner or manager is the only manger, then the owner/supervisor bears full price of the perks.

But if the owner/ supervisor only own a part of the company, the manager reaps all the advantages of the perks however the cost is shared by external shareholders. Potential buyers know this might happen, so that they pay much less for a minority interest in a company.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

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Possible agency conflict between managers/ inside owners and outside shareholders.

To discuss: Possible agency conflict between managers/ inside owners and outside shareholders.

Explanation of Solution

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