What Is the Most Common Way That Agency Problems Are

question 25

Multiple Choice

What is the most common way that agency problems are addressed in most corporations?

• A) by minimising the number of decisions that a manager makes where there is a conflict between the manager's interests and those of the shareholders
• B) by prosecuting managers who have been found to have illegally used company monies for their own benefit
• C) by terminating the employment of employees who are found to have put their own interests above that of the company's
• D) by using disinterested outside bodies to adjudicate between managers and shareholders when such conflicts arise

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Definitions:

Personality Module

An electronic module that contains software or firmware to provide specific characteristics or functions to a system, often customizable.

Internal Rate

The discount rate at which the net present value of all cash flows from a particular project or investment equals zero, used in evaluating the profitability of investments.

Accept

To agree to take or receive something offered.