Suppose in order to defraud the shareholders, a manager sets up an independent company that he owns sells the main company's output to this company. He would be tempted to set the transfer price

Question

Quizplus · Accepted Answer

By setting the transfer price below market prices, the manager can benefit the independent company he owns by purchasing the main company's output at a lower cost, potentially increasing his personal profits at the expense of the main company's shareholders.

Suppose in Order to Defraud the Shareholders, a Manager Sets