When the Interests of Management and Owners Are Not Aligned

question 68

Multiple Choice

When the interests of management and owners are not aligned, there will likely be a(n)

• A) agency problem.
• B) free agency dilemma.
• C) shareholder rebellion.
• D) shareholder resolution.

---

Definitions:

Linear Model

A representation or approach that assumes a straight-line relationship between variables, often used in statistics and forecasting.

Hierarchical Level

A ranking system within an organization where positions are placed in levels of importance and authority from the highest to the lowest.

Compensation Level

The relative amount of payment or reward that an employee receives for doing their job, including wages, salaries, bonuses, and benefits.

Markov Model

A statistical model that predicts a system's future state based on its current state, often used in decision-making processes.