Agency problem
Agency problem also known as agency costs occurs in a two-party relationship (principal/agent) where the agent is expected to act or make decisions for the good of the principal.
For example in a corporate the relationship between the management and shareholders. The management is expected to make decisions that will maximize shareholders interest. The problem arises when the two parties have different interests. In the example above the manager may opt to make his own wealth and not act in the company’s best interest which could be maximizing company’s market value.
Examples of agency relationship in finance
Managers/stockholders
Managers/Creditors
Causes of conflicts between managers and stockholders may include;
Remuneration - low remunerations or fixed salaries despite increased profit margins.
Differences in risk profile- stockholders may prefer high-risk return investments contrary to the managers. When high-risk investment go bad the manager risks job loss
Manipulation of accounting systems- to reflect high profits.
Unnecessary perks management award themselves.
Solution to these problems include threat for firing in case of poor performance, shareholders may also threaten to sell the company, remuneration based on performance, incurring agency costs-these are costs incurred while hiring external auditors, setting a control system, legal costs for employment letters and contracts.
Agency problem may be reduced by motivating the manager to act for the companies best interest by offering incentives
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Answer:
They add sulfur oxide to the atmosphere causing acidic rain.
Explanation:
At combustion , they release pollutants like sulfur and Nitrogen oxides to the atmosphere which contributes to the formation of acidic rain and smog among other negative consequences.
Answer: The answers are A,B,E,F
Explanation: because i listened to the wrong answers and they showed me what i had got wrong and it showed me the answers to the questions! IF YOU GUYS GET IT RIGHT LIKE THE ANSWER !! HOPE THIS HELPED!
Answer:
D. Chemoautotrophs
Explanation:
Autotrophs in plain are organisms that synthesize their own food while hetrotrophs are organisms that do not synthesize their own food.
Chemotrophs (Chemoautotrophs and Chemohetrotrophs) are a group of organisms that obtain their energy through the oxidation of inorganic molecules, These organisms require carbon to survive and reproduce.
Chemoautotrophs are able to produce inorganic molecules by the fixation of CO2 from their immediate environment. The energy required for this process is got from Nitrogen, Magnesium, Sulphur etc.
Chemohetrotrophs are a class of chemotrophs that are unable to synthesize their own food but rather ingest complex molecules like carbohydrates from the environment.
Phototrophs are a group of organisms unlike chemotrophs that depend on the source of light or sunlight for synthesizing its food or organic molecules.
Photoautotrophs are basically photosynthetic plants which are able to carry out photosynthesis ie the conversion of CO2 and H2O to give Glucose and Oxygen in the presence of sunlight.
Photohetrotrophs are a class of organisms that do not synthesize their own food but rely on other organisms or already made organic molecules.
