The Principal-Agent Problem Means That Managers Must

question 77

Multiple Choice

The principal-agent problem means that managers must

• A) find ways for managers to get people to buy stock in their company.
• B) devise compensation rules to induce principals to act in the best interest of agents.
• C) devise compensation rules to induce agents to act in the best interest of principals.
• D) find efficient agents who will negotiate fair compensation rules for a firm's principal managers.

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