Identify an Accurate Statement About Agency Problems

question 3

Multiple Choice

Identify an accurate statement about agency problems.

• A)They are mostly faced by sole proprietorships.
• B)The managers of a corporation are also called the principals.
• C)They occur when the goals of principals differ from those of agents.
• D)The shareholders of a corporation act as the agents of the principals.

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Definitions:

Bad News

Unfavorable or distressing information that needs to be communicated to someone.

Direct Format

Refers to a straightforward and clear way of presenting information or communication, without unnecessary embellishments or digressions.

Conveying Negative Information

The process of communicating unfavorable news or feedback in a sensitive or tactful manner.

Buffer

A temporary storage area or a means to mitigate the impact of something negative.