Agency Costs and Their Impact on Companies

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Which one of the following is a definition of agency cost?

The costs incurred if the manager uses the company's resources for his own benefit (correct)

The costs of techniques that shareholders use to prevent the manager from prioritizing his interests over the shareholders'

The costs arising from the different cultures of foreign subsidiary managers

The costs associated with having subsidiaries in foreign countries

Which one of the following factors contributes to higher agency costs for multinational corporations (MNCs)?

Inconsistency in MNC goal (correct)

Sheer size of larger MNC

Different cultures of foreign subsidiary managers

Distance for subsidiaries in foreign countries

What is one way to solve the agency problem in MNCs?

Parent control: Clear communication and oversight of subsidiary decisions (correct)

Corporate control: Maximizing the values of respective subsidiaries

Corporate control: Investor monitoring

Parent control: Reducing the power of subsidiary managers

Which of the following is NOT a factor contributing to higher agency costs for MNCs?

Consistency in MNC goal Signup and view all the answers

What are agency costs?

The costs incurred if the manager uses the company's resources for his own benefit Signup and view all the answers

Which of the following is NOT a factor contributing to higher agency costs for multinational corporations (MNCs)?

Consistency in MNC goal Signup and view all the answers

What is one technique that shareholders can use to prevent the manager from prioritizing their own interests over the shareholders' interests?

Investor monitoring Signup and view all the answers

What is the definition of agency cost?

The costs incurred if the manager uses company's resources for his own benefit Signup and view all the answers

What are some factors that contribute to higher agency costs for MNCs?

All of the above Signup and view all the answers

What is one way to solve the agency problem in MNCs?

All of the above Signup and view all the answers

Agency Costs and Their Impact on Companies

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Questions and Answers

Which one of the following is a definition of agency cost?

Which one of the following factors contributes to higher agency costs for multinational corporations (MNCs)?

What is one way to solve the agency problem in MNCs?

Which of the following is NOT a factor contributing to higher agency costs for MNCs?

What are agency costs?

Which of the following is NOT a factor contributing to higher agency costs for multinational corporations (MNCs)?

What is one technique that shareholders can use to prevent the manager from prioritizing their own interests over the shareholders' interests?

What is the definition of agency cost?

What are some factors that contribute to higher agency costs for MNCs?

What is one way to solve the agency problem in MNCs?

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