How does agency theory affect insider trading activities

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Reference no: EM131229024

Cite at least one peer reviewed Journal per answer/question APA format using in text-citations for all quoted or paraphrased material

1. Discuss the implications on the firm of the divergent interests between management and stockholder. How are these implications further complicated by other stakeholders such as vendors, customers, employees, bankers, and the public?

2. How does agency theory affect insider trading activities? Do executives in the firm have any information advantage over outside investors?

3. Explain what is meant by the term "agency costs." How do you define agency costs? Provide authoritative support from the literature to support your definition.

4. How are securities markets affected by agency problems? What measures should regulators take to prevent abuses?

5. Consider oftentimes management owning significant percentages of shares in the firm are one and the same as the owners. What problems do management ownership present related to agency problems?

6. What are some strategies found in the literature to counteract agency problems? What are some of the problems associated with each strategy?

7. How is fraud related to agency problems? Where does an agency abuse turn into fraudulent behavior?

8. Explain the impact of agency theory on short- and long-term financial performance.

Reference no: EM131229024

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