Agency Costs and Their Impact on Companies
10 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

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?

    <p>Consistency in MNC goal</p> Signup and view all the answers

    What are agency costs?

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

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

    <p>Consistency in MNC goal</p> 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?

    <p>Investor monitoring</p> Signup and view all the answers

    What is the definition of agency cost?

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

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

    <p>All of the above</p> Signup and view all the answers

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

    <p>All of the above</p> Signup and view all the answers

    More Like This

    Examen de Conceptos en Gobierno Corporativo
    5 questions

    Examen de Conceptos en Gobierno Corporativo

    RazorSharpOlive avatar
    RazorSharpOlive
    Agency Costs of Equity
    8 questions

    Agency Costs of Equity

    RapidTechnetium avatar
    RapidTechnetium
    Moral Hazard and Accounting in Corporate Governance
    40 questions

    Moral Hazard and Accounting in Corporate Governance

    InexpensiveAntigorite596 avatar
    InexpensiveAntigorite596
    Agency Costs in Management
    37 questions

    Agency Costs in Management

    HappierZeugma avatar
    HappierZeugma
    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser