Answered>Order 3026

Both Talmot and Delmont are large public companies with subsidiaries throughout the world.  Delmont uses a decentralized approach and its subsidiaries make most of their own decisions. Talmot uses a centralized approach and makes most of the decisions for its subsidiaries.    

Which of the following is correct?

*Agency COSTS would be the same for both companies.

*Agency PROBLEMS would be the same for both companies

*Agency problems would probably be more pronounced for Delmont because it is more likely that subsidiary decisions would conflict with the parent

*Agency problems would probably be more pronounced for Talmot because it is more likely that subsidiary decisions would conflict with the parent

*None of the above