Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / What is an example of an action by a financial manager that creates an agency problem?

What is an example of an action by a financial manager that creates an agency problem?

Marketing

What is an example of an action by a financial manager that creates an agency problem?

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

There would be some examples that cause agency problems between a financial manager and shareholders:

  • The business generates significant income, but the financial manager suggests not to paying out cash dividends to shareholders while there are no expected use of the excess cash in the future.
  • The financial manager approves a third party to joint a firm's project since this company provides the financial manager a cash value. This action is against the firm's benefits.