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Question: In some industries, merger agreements stipulate that a high-ranking executive of one company will be president or chairman of the board of the merged company for a certain period of time, say four years, after which a high-ranking executive from the other will get the job for the same term. Is this sort of behavior evidence of a principal/agent problem between executives and shareholders? Why or why not?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M93111657

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