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Explain the principal-agent problem as it pertains to equity contracts.

Explain the principal-agent problem as it pertains to equity contracts.

发布时间:2025-07-24 09:21:26
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答案:The principals are the stockholders who own most of the equity. The agents are the managers of the firm who generally own only a small portion of the firm. The problem occurs because the agents may not have as much incentive to profit maximize as the stockholders.
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