Question

vasily is a manager at a large snack foods company. vasily believes his company would benefit from being larger and thinks the shareholders would support such growth. the company is doing relatively well but needs to focus on stabilizing profits and expenditures. vasily pushes for an acquisition anyway. the reason for this acquisition is . multiple choice question.

Answer 1

Vasily pushes for an acquisition anyway. The reason for this acquisition is principal agent problem.

A conflict of interests between a person or group and the agent appointed to act on their behalf is known as the principal-agent dilemma. It is possible for an agent to do actions that are not in the principal's best interests.

The principal-agent problem is as complex as the range of principal and agent responsibilities. It can happen in any circumstance where the primary or owner of an asset transfers direct control of the asset to a third party or agent.

Agency costs are the possibility that the agent will take actions that are not in the principal's best interests. In order to align priorities and solve a principal-agent problem, the rewards system may need to be changed.

To know more about principal agent:

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