Agency theory, Finance Basics

Assignment Help:

Agency Theory

An agency relationship arises whether one or more parties identified the principal contracts or hires another identified an agent to perform on his behalf some employed and then delegates decision creating authority to such hired party or Agent In the field of finance shareholders are the owners of the firm.  Although, they cannot arrange the firm as:

1. They may be moreover many to run a single firm.

2. They may expertise to run the firm and not have technical skills

3. They may not have time and are geographically dispersed.

Shareholders although employ managers who such will act on their behalf.  The managers are thus agents whereas shareholders are principal.


Related Discussions:- Agency theory

Assignment, How would you explain the value of financial planning to friend...

How would you explain the value of financial planning to friends or family? Which topics will you discuss with children in your life? Which topics do you feel are most imp

Project apparisal, challenges your likely to face when apparising a project...

challenges your likely to face when apparising a project on the implemtation stage

What is holding period return, What is Holding Period Return/Return ...

What is Holding Period Return/Return Holding period yield (HPY) measures the total return from an investment during a given time period in which asset is held by the investo

Objectives or goals of business, Objectives or Goals of Business 1. P...

Objectives or Goals of Business 1. Profit maximization - This is a traditional and a cardinal objective of a business.  This is so for the following purpose: To

Agency theory, Agency Theory An agency relationship arises whether on...

Agency Theory An agency relationship arises whether one or more parties identified the principal contracts or hires another identified an agent to perform on his behalf some

Relationship among money, Relationships and interactions among money, bond,...

Relationships and interactions among money, bond, stock and mortgage markets

Assignment, what are the difference between receipt and payment account and...

what are the difference between receipt and payment account and income and expenditure account ?

1, what will happen to the loss on account of premium redemption of debentu...

what will happen to the loss on account of premium redemption of debenture through sinking fund? Where do i close this account to?

Investment analysis, Ask questConsider an 8% coupon bond selling for $953.1...

Ask questConsider an 8% coupon bond selling for $953.10 with 3 years until maturity making annual coupon payments. The interest rates in the next 3 years will be, with certainty, r

Different evaluation horizons and mbo, Different Evaluation Horizons and MB...

Different Evaluation Horizons and MBO Different Evaluation Horizons Managers might undertake projects that are profitable in short-run. Shareholders on the other hand evalu

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd