Discuss the agency problem and potential solutions

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Reference no: EM13288355

Suppose you own 100 shares of Comapny X's stock which you intend to sell today. Since you will sell it in the secondary market, Company X will receive no direct cash flows as a consequence of your sale. Why, then should Company X's management care about the price you get for your shares? Discuss the agency problem and potential solutions for the problem.

Reference no: EM13288355

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