1. What does 'agency theory' refers to? What are some examples and relevant legislation? In addition, what is an example of an agency relationship that you may be familiar with? 2. Which ratio(s) are the most important for a corporation and why? Be sure to not only provide a definition of the ratio, but also inform why it is believed to be important to a firm/ an investor.

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1 Agency Theory Agency theory refers to the relationship between principals owners and agents managers in a business organization where the agents are entrusted to make decisions and act on behalf of ... View the full answer