Agency Theory Is Concerned with Resolving Two Problems That Can

question 67

Multiple Choice

Agency theory is concerned with resolving two problems that can occur in agency relationships.Which of the following is not one of those problems?

• A) Goals conflict between principals and agents.
• B) Verification of actual agency activity is expensive and difficult to obtain.
• C) Principals and agents have differing attitudes toward risk.
• D) Stockholders and management align with external stakeholders.

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Definitions:

Visionary

An individual with a clear, distinctive, and specific future view, combined with the ability to communicate that vision in a way that influences others.

Empowering

The act of giving someone the authority or power to do something, or making someone stronger and more confident, especially in controlling their life and claiming their rights.

Leader Emergence

The process through which an individual becomes recognized as a leader by their peers or within an organization.

Privileges

Special rights, advantages, or immunities granted or available only to a particular person or group of people.