Managers of older, cash cow, publicly traded companies

Question

Quizplus · Accepted Answer

Managers of older, cash cow, publicly traded companies may have little incentive to control agency problems, as they may not face the same pressure to perform as owner-entrepreneurs. Additionally, they may sometimes prioritize their own wealth over the interests of existing shareholders, resulting in the expropriation of value from these shareholders. Therefore, both option B and C are correct. Managers of older, cash cow, publicly traded companies may have little incentive to control agency problems as they may already have established themselves in the market and may not require additional funding. Additionally, these managers may sometimes prioritize their own wealth over the interests of existing shareholders, resulting in expropriation of value.

Managers of Older, Cash Cow, Publicly Traded Companies