Question: Why are agency issues likely to be a problem during an acquisition? Managers have a lot of personal wealth tied up in the firm they

Why are agency issues likely to be a problem during an acquisition?
Managers have a lot of personal wealth tied up in the firm they manage.
Managers may not be familiar with the new industry.
Managers own the free cash flow of the firm.
Managers have the potential to create a spinout, taking valuable knowledge.

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