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Why do shareholders bear most of the risk of running a firm

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Reference no: EM132757156

Problem 1: Why do shareholders bear most of the risk of running a firm?

a. They only have a residual claim on the firm's cash flows.

b. They receive a salary from the company.

c. They are guaranteed a fixed payout each quarter.

d. Shares can be taken away at any time without notice.

Problem 2: What do we call the possible conflict of interests between shareholders and management

a. Agency problem.

b. Stakeholder problem

C. Double taxation

d. Shareholders' dilemma

Reference no: EM132757156

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