Describe the principal-agent problem in finance

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1. Describe the principal-agent problem in finance. Further, list and analyse the tools that could be used to alleviate this problem .

2. A stock has an expected return of 13 percent, the risk-free rate is 3.7 percent, and the market risk premium is 7.4 percent. What must the beta of this stock be? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

3. A firm has planned operating expenses of 170,000 a profit goal of 110,000 and reductions of 35,000 and it expects sales of 650,000 Compute the Initial markup percentage.

Reference no: EM131906563

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