Costs Associated with the Conflicts of Interest Between the Managers

question 9

Multiple Choice

Costs associated with the conflicts of interest between the managers and the shareholders of a corporation are called:

• A)legal costs.
• B)bankruptcy costs.
• C)administrative costs.
• D)agency costs.

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Definitions:

Legal Claim

A formal assertion by a party that they are entitled to some legal right or remedy.

Enforceable

Capable of being imposed or upheld by legal process or authority.

Release

A contract in which one party forfeits the right to pursue a legal claim against the other party.

Recovery

The process of obtaining rightful recovery or reimbursement for losses, damages, or sums owed.