The Principal-Agent Problem ________

question 90

Multiple Choice

The principal-agent problem ________.

• A) occurs when managers have more incentive to maximize profits than the stockholders-owners do
• B) in financial markets helps to explain why equity is a relatively important source of finance for Canadian business
• C) would not arise if the owners of the firm had complete information about the activities of the managers
• D) explains why direct finance is more important than indirect finance as a source of business finance

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Definitions:

Gesturing

The act of making motions with the body or limbs as a form of non-verbal communication.

Down Syndrome

A genetic disorder caused by the presence of all or part of a third copy of chromosome 21, characterized by physical growth delays, characteristic facial features, and mild to moderate intellectual disability.

Congenital Heart Disease

A heart abnormality present at birth, involving the structure of the heart walls, chambers, or valves.

Congenital Anomaly

A medical condition or physical irregularity that is present from birth, resulting from genetic or environmental factors.