The finance manager chooses to pursue a risky investment for the company's funds because his compensation will
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Question:
- The finance manager chooses to pursue a risky investment for the company's funds because his compensation will substantially rise if it succeeds. Explain why this behaviour of the finance manager represents an agency problem.
Expert Answer:
The finance managers behavior is an agency problem because it creates a conflict of interest between ... View the full answer
Related Book For 
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
Posted Date:
