Which of the Following Statements Concerning "Agency Problems" Is Most

question 11

Multiple Choice

Which of the following statements concerning "agency problems" is most correct?

• A) Regardless of economic conditions, if a firm's share price falls during the year, this indicates that the firm's managers must not be acting in the best interests of the shareholders.
• B) One method of controlling agency problems is to engage in the taking of "poison pills."
• C) One of the best means to control agency problems is to require the managers and other important decision makers of the firm to also be owners of the firm.
• D) Agency problems probably would not exist if the important decisions of a firm were made by persons who have no vested interests, such as ownership, in the firm.
• E) None of the above is a correct statement.

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