BADM 2003W Lecture Notes - Lecture 13: Leveraged Buyout, Opportunity Cost, Money Management
12 Apr 2016
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Their property rights are the basis for everyone. Life political institutions, need representative arrangements so they elect. Legally responsible for affairs of the corporation. Day to day responsibility for decisions, and control over the detailed information needed for decisions. Ceo is often the chairman of the board. Management suggests new board of members, and suggestions are often taken. Matters are too complex for more than cursory discussion. A way to think about the relationship between managers and shareholders. After the contract is set, agents have incentives that differ from the those of tof the principal. Paid by commission, so some incenive to care about the price. But also has a porfolio of other properies to sell. Payment rate vary between family and succes. Share more of the returns to the agents. Agent has something to lose if he does a bad job. Total = residential loss + out of pocket costs. Nearly half of corporations received a takeover offer.
