What is meant by an agency cost or agency problem

Reference no: EM131334655

1. What is meant by an "agency cost" or "agency problem"? Do these interfere with shareholder wealth maximization? Why? What mechanisms minimize these costs/problems?

2. Are ethics critical to the financial manager's goal of shareholder wealth maximization? How are the two related? Is the establishment of corporate ethics policies and guidelines, requiring employee compliance, enough to ensure ethical behavior by employees?

Reference no: EM131334655

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