Explaining agency cost or agency problem

Reference no: EM1310484

Q1) Carry out some internet research. How does level of education have an effect on income? How does this information affect your plans for the education and career? Do you plan to pursue higher education and earn degree? Describe why or why not?

Q2) What do you mean by the “agency cost” or “agency problem”? Do these interfere with maximizing shareholder wealth? Explain why or why not? What mechanisms minimize these costs/problems? Are executive compensation contracts effective in mitigating them?

Q3) What safety measures should one take when utilizing ratio analysis to make financial decisions? Which ratios would be most useful for financial manager’s internal financial analysis? For the analyst trying to decide on which stocks are most attractive within the industry?

Reference no: EM1310484

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