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Which parties have the proper incentives to make risky

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Reference no: EM132757137

Problem 1: Which of the following parties have the proper incentives to make risky, value increasing investments for the firm?

a. suppliers

b. creditors

c. shareholders

d. managers who are only compensated with a salary

Problem 2: Shareholders can attempt to overcome agency problems by all but the following:

a. incurring costs to monitor managers

b. paying managers a good salary

c relying on market forces to exert managerial discipline

d. paying the manager a proportion of the profits that the firm generates

Reference no: EM132757137

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