homework2 - Mitch McMichael AEM 4230 Contemporary Topics in...

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Mitch McMichael AEM 4230 Contemporary Topics in Applied Finance Monday September 8, 2010 Homework 2 1. When referring to the Principle-Agency relationship, it states that the principals (the investors) entrust their money to an agent (the producer), who is supposed to take a beneficial action on their behalf. In regards to the Canadian boards that are being discussed, you can definitely side with both parties in the discussion. Being from Canada while attending an American institution I am able to see both sides of the business world and life in general, and although we are considered extremely similar countries there are in fact a number of differences. The shear physical magnitude of the business district in New York City compared to that of Toronto is very wide, but from a more direct standpoint businesses in Canada are much smaller and less of a variety. The population of Canada is 34 million people while the population of New York City alone is 8.4 million. Clearly, there is going to be a large number of corporations because of the increased population of a first world country. To argue on the side of the Canadian board of directions, it is in their best interest to act on a number of related boards to be familiar with a number of industries especially if they are related. They will be able to act in a way that will better the return for the principals of their companies. As stated before, many of these corporations are small, family oriented businesses that already run on trust within the organization. With this in mind, the financial
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This note was uploaded on 01/08/2012 for the course AEM 4230 taught by Professor Bogan,v. during the Fall '08 term at Cornell University (Engineering School).

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homework2 - Mitch McMichael AEM 4230 Contemporary Topics in...

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