Question: In your own words explain the principal agent problem as applied to the relationship between shareholders and managers. Make sure to discuss the source(s) of

  1. In your own words explain the principal agent problem as applied to the relationship between shareholders and managers. Make sure to discuss the source(s) of the problem.
  2. In the context of corporations, explain what corporate governance mechanisms can be used to reduce these problems.
  3. Why might these disciplinary mechanisms not work in practice?

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