The Principal-Agent Problem of Ownership Vs

question 89

Multiple Choice

The principal-agent problem of ownership vs. control of the corporation tends to get worse when:

• A) stock in a corporation is held exclusively by a small number of people who control the company's day-to-day operations.
• B) stock in the company is tightly held, but there are some "outsider" stockholders.
• C) stock in the company is very diffusely held, with no individual or group having control over a large block of stock.
• D) managers have profit-sharing schemes as part of their incentive package.
• E) managers focus on maximizing the firm's profits, rather than the firm's market share.

---

Definitions:

Navajo

A Native American people of the Southwestern United States, renowned for their rich cultural heritage, including art, textiles, and beliefs.

Union Army

The land force that fought for the Union during the American Civil War, which was primarily composed of regiments from the Northern states.

Copperheads

Copperheads were a faction of Northern Democrats during the American Civil War who opposed the war and advocated for peace with the Confederacy.

Northern Opponents

Refers to individuals or groups in the northern United States who opposed certain policies, practices, or institutions, often in the context of slavery or during political conflicts.