Economists Refer to the Conflict Between the Interests of Shareholders

question 122

Multiple Choice

Economists refer to the conflict between the interests of shareholders and the interests of top management as

• A)a stock-equity problem.
• B)a liability problem.
• C)a principal-agent problem.
• D)a financial intermediary problem.

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Definitions:

Compounded Annually

An interest calculation method where the interest is added to the principal at the end of each year, and future interest accrues on the new principal.

Accumulated

This term often refers to the total amount of something gathered over time, such as accumulated depreciation or accumulated earnings.

Liability

The financial liabilities or obligations that a company legally incurs in the course of conducting its business.

Savings Account

A deposit account held at a financial institution that provides principal security and a modest interest rate.