Explain the conflict between shareholders and managers

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1. Discuss why the financial objective of a firm is to maximise shareholders wealth and not to maximise the profit.

2. Explain the conflict between shareholders and managers. How can this conflict be managed?

3. Discuss the intuition behind the present value. Show how to calculate the present value when the cash flow is perpetuity, growing perpetuity, annuity and growing annuity.

Reference no: EM133116050

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