MANAGEMENT

Detailed explanation-1: -An agency problem is a conflict of interest inherent in any relationship where one party is expected to act in another’s best interests. In corporate finance, an agency problem usually refers to a conflict of interest between a company’s management and the company’s stockholders.

Detailed explanation-2: -Agency problems refers to conflicts that occur when an agent (manager) who is entrusted with following the interests of the principal (shareholder or owner) of an organization abuses their position to further their own personal goals.

Detailed explanation-3: -The agency problem can be defined as a conflict when the agents entrusted with the responsibility of looking after the interests of the principals choose to use the power or authority for their benefits and in corporate finance. It is a conflict of interest between its management and stockholders.

Detailed explanation-4: -Type 1 is the agency problem agency problem that arises between the principal as the owner of companies and agents as the manager who is the executor the company’s operations. While the issue of agency Type II is the agency problem that occurs between controlling shareholders and minority shareholders.

Detailed explanation-5: -Agency costs are the costs of disagreement between shareholders and business managers. Shareholders and managers often find themselves in disagreement about the best moves a company can make, and this is known as the “agency problem.” Costs stemming from agency problems are agency costs.