(Answered) 1what is meant by an agency cost or agency problem do these

Finance

1) What is meant by an "agency cost" or "agency problem"? Do these interfere with shareholder wealth maximization? Why? What mechanisms minimize these costs/problems? Are executive compensation contracts effective in mitigating these costs/problems?

2) What precautions must one take when using ratio analysis to make financial decisions? Which ratios would be most useful for a financial manager's internal financial analysis? For an analyst trying to decide on which stocks are most attractive within an industry?

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