Substantial businesses with operations in several countries

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Ahmed and Barbara both started new U.S.-based companies seven years ago that have grown into substantial businesses with operations in several countries. Both are still majority owners of their companies. Ahmed actively manages all of his company's subsidiaries, either himself or with his top U.S.-based managers leading the international subsidiaries. Barbara relies more on local managers to lead her company's subsidiaries in other countries to take advantage of their local knowledge. Whose company, Ahmed's or Barbara's, is more likely to have higher agency costs? Briefly explain why.

Reference no: EM133145618

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