?

Corporate Finance

Free Version

Upgrade subject to access all content

Moderate

Separation of Ownership and Management

CORPFN-ZB1ENK

Corporations allow for separation of management of a company from the ownership. This is beneficial because owners do not have to be experts in the business in order to invest in it. However, the drawback of this separation between managers and owners are:

Select ALL that may apply.

A

Agency cost

B

Information asymmetry

C

Transactions cost

D

Limited liability

E

Operation cost