There is potential for an agency problem if Stanley decides to go ahead and invest in the software developer. This investment will cause a temporary decrease in the earnings per share (EPS) of the firm which will mean fewer earnings at the present time for the stakeholders. This may be a problem if the goal of the shareholders is to gain money sooner than later. However, it the goal of the shareholders is simply to maximize wealth,there may not be an agency problem since the goal of the financial manager, Stanley, is the
same as the shareholders’