PRINCIPLES OF MANAGERIAL FINANCE (SUBSCR
PRINCIPLES OF MANAGERIAL FINANCE (SUBSCR
15th Edition
ISBN: 9780137695621
Author: SMART
Publisher: PEARSON C
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Chapter 1.2, Problem 1.9RQ
Summary Introduction

To discuss: The role of incentives when the manager does not act as per the best interest of company’s shareholders.

Introduction:

The major goal of the firm is the maximization of stock value. In order to maximize the stock value, the financial manager implements the necessary actions that result in the maximum gain without taking into the future consequences.

An authorized person who acts on the behalf of another person or investor to buy or sell securities is termed as agent. The person who appoints the agent is termed as principal.

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