Explain the principal-agency problem. Explain agency costs. Can you propose potential solutions to reduce agency costs?
2. Explain the concepts of the primary market and the secondary market. Assume that you have a hobby to collect stamps and you make profits from selling the stamps on the ebay website. In this case, do you think that the ebay website is a primary or secondary market? Do you think whether the development of the primary market or the secondary market is more important for corporates to raise funds?
3. Discuss main differences between three ownerships, i.e. sole proprietorship, partnership and corporations, in terms of corporate control and liabilities.