Why agency problems within greenfuture plc might arise

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Question - Suppose you are a shareholder in GreenFuture Plc. It has been decided at the recent Board of Directors meeting that, due to the current economic climate, the business is not going to pay a dividend for the next five years. Instead, the Board of Directors has decided it is going to invest in the increase of the production of electric vehicles to meet an upsurge in demand.

Discuss the reasons why agency problems within GreenFuture Plc might arise. What alternative funding options might the company's management consider in order to mitigate any resulting conflict? Make sure your discussion takes into account the viewpoint of both the financial manager and shareholders.

Reference no: EM133185167

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