A Manager Under-Investing in Projects That Are in Shareholder's Best

question 24

Multiple Choice

A manager under-investing in projects that are in shareholder's best interests but which may reduce the manager's own bonus payment, is classed as which type of agency cost?

• A) Monitoring cost
• B) Loss from incongruent goals
• C) Loss from a poor decision
• D) Contracting cost

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Definitions:

Fraternal Polyandry

A form of marriage in which a woman is married to two or more men who are brothers, practiced in some cultures for economic and societal reasons.

Sororal Polyandry

A form of marriage in which two or more brothers are married to the same wife, specifically among sisters.

Patrilateral Parallel-cousin

A cousin from the father's side of the family who is the child of the father's brother or sister.