Solution to the agency conflict, Finance Basics

Solution to the Agency Conflict

The government can acquire the following actions to protect itself and its interests.

1. Acquire monitoring costs

E.g. the government incurs costs associated along with:

  • Statutory audit
  • Investigations of companies within Company Act
  • Back duty investigation costs to recover tax evaded in the previous
  • VAT refund audits


2. Lobbying for directorship representation

The government can lobby about directorship in companies that are deemed to be of strategic nature and significance to the entire economy or society.

3. Offering investment incentives

To encourage investment in provided areas and places, the government suggests investment incentives in type of capital allowance like laid down in the Second schedule of Cap 470.

4. Legislations

The government has given legal framework to govern the processes of the company and provide security to specific people in the society like regulation associated along with disclosure of information, salaries and minimum wages, environment security etc.

5. The government can uncalculated the sense and spirit of social responsibility on the behavior of the firm, that will eventually good for the firm in future.

Posted Date: 1/29/2013 1:53:45 AM | Location : United States

Related Discussions:- Solution to the agency conflict, Assignment Help, Ask Question on Solution to the agency conflict, Get Answer, Expert's Help, Solution to the agency conflict Discussions

Write discussion on Solution to the agency conflict
Your posts are moderated
Related Questions
A bond that has $1000 face value and a contract interest rate of 11.4%. The bonds have a current value of $1124 and will mature in 10 years. The firms marginal tax rate is 34%. The

1. Biily Mays , Inc, (BMC) is interested in acquiring a 1 million pre to print and circulate its meages. The press has 8 years useful life at the end of which its expected to be 90

Importance of Working Capital Management The finance manager must understand the management of working capital since of the following purpose: a) Time devoted to working c

You are called in as a financial analyst to appraise the bonds of Olsen’s Clothing Stores. The $1,000 par value bonds have a quoted annual interest rate of 13 percent, which is pai

Question: Suppose that a security is presently selling for a price of $65, the nominal interest rate is 8%, and the security volatility is 0.15. a) Determine Delta of a Euro

Tax Differential Theory Advanced via Lichtenberger and Ramaswamy in 1979.They argued that tax rate on dividends is higher quite than tax rate on capital gains. Thus, a firm th

Assignment: Mr. Ali wants to start “Rent-A-Car” business. He wants to start this business with at least 20 cars. He estimates that the required investment for the business is Rs.

A bondholder buys a bond maturing in two years for Rs. 120 and earns Rs.15 per annum as interest. His YTM is ______ %.

In order to value a debt security correctly, we must understand the terms and conditions of debt securities precisely. These terms define the contractual rights of the debt securit