Principal-agent problems are not addressed in the market for corporate control.

Question

Quizplus · Accepted Answer

The market for corporate control is a mechanism that helps to address principal-agent problems by allowing outside investors to acquire ownership and control of companies whose current management is not maximizing shareholder value. Through acquisitions or takeovers, the market for corporate control creates an incentive for managers to act in the best interest of shareholders to avoid losing their jobs or seeing their stock options decrease in value.

Principal-Agent Problems Are Not Addressed in the Market for Corporate