Principles of Corporate Finance_ 12th Edition

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bre44380_ch33_867-886.indd 886 09/30/15 12:12 PM


886 Part Ten Mergers, Corporate Control, and Governance


INTERMEDIATE


  1. Corporate governance Agency problems are inevitable. That is, we can never expect man-
    agers to give 100% weight to shareholders’ interests and none to their own.
    a. Why not?
    b. List the mechanisms that are used around the world to keep agency problems under
    control.

  2. Finance by intermediaries Banks are not the only financial intermediary from which cor-
    porations can obtain financing. What are the other intermediaries? How much financing do
    they supply, relative to banks, in the United Kingdom, Germany, and Japan?

  3. Corporate governance Why is transparency important in a market-based financial
    system? Why is it less important in a bank-based system?

  4. Corporate governance What is meant by dual-class equity? Do you think it should be
    allowed or outlawed?

  5. Financial system structure What kind of industries do you think should thrive in a
    market-based financial system? In a bank-based system?

  6. Pyramids Why are pyramids common in many countries but not in the United States or
    United K ingdom?

  7. Financial system structure What are some of the advantages and disadvantages of
    Japanese keiretsus?

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