According to Agency Theory, Which of the Following Is NOT

question 32

Multiple Choice

According to agency theory, which of the following is NOT a fundamental difference between owners and managers?

• A) Owners are more focused on minimizing costs than are managers.
• B) Owners are more inclined to accept risk than are managers.
• C) Owners focus more on short-run profitability than do managers.
• D) Managers are more inclined than owners to spend resources on activities that are not essential to organizational profitability.
• E) Managers serve as agents who represent owners' interests.

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Definitions:

Denhardt

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