Which of the Following Firms Is Most Likely to Suffer

question 62

Multiple Choice

Which of the following firms is most likely to suffer from principal-agent problems?

• A)A young firm in a growth industry
• B)A mature firm with few growth opportunities
• C)A mature firm with few growth opportunities and which is controlled by its management
• D)A mature firm with few growth opportunities and which, though being controlled by its managers, has highly concentrated stock ownership

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Definitions:

Diversity

The inclusion of individuals from a variety of backgrounds, perspectives, and abilities in a group or organization.

Quotas

Preset limits or targets for a specific measurement, such as production, immigration, or tariffs, within a given timeframe.

Discrimination

Unjust or prejudicial treatment of different categories of people, especially on the grounds of race, age, sex, or disability.

Single parent

An individual who raises a child or children without the assistance of a partner, typically in a sole caretaker role.