Answer to Question #176527 in Management for Moni

Question

1. Where will we get the long-term financing to pay for the investments?

2. What should be the goal of a corporation? Does this mean we should do anything and everything to maximize owner wealth?

3. What are agency problems, and why do they exist within a corporation?

Answer 1

1. These includes Credit and bank loans, venture capital, equity financing and debentures.

2. The ultimate goal of any corporation is to make money.

This mean we should do anything and everything to maximize owner wealth provided we leave our customers satisfied with our services.

3.  In corporate finance, the agency problem usually refers to a conflict of interest between a company's management and the company's stockholders.

The agency problem arises due to an issue with incentives and the presence of discretion in task completion.