What is “agency theory?”

University of Phoenix Material

Calculating Ratios Short Answer

1. What is “agency theory?” How can setting the appropriate goals for the firm minimize the agency problem?
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2. Differentiate between profit maximization and wealth maximization.
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3. Why must organizations focus on both shareholder wealth and the stakeholders?
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4. Differentiate between the three financial statements with which managers should be familiar. How are they linked?
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References

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