Which One of the Following Is an Agency Cost

question 4

Multiple Choice

Which one of the following is an agency cost?

• A)accepting an investment opportunity that will add value to the firm
• B)increasing the quarterly dividend
• C)investing in a new project that creates firm value
• D)hiring outside accountants to audit the company's financial statements
• E)closing a division of the firm that is operating at a loss

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Definitions:

Time Pressures

The stress or urgency to complete tasks or make decisions within a limited timeframe.

Unreasonable Standards

Expectations or benchmarks that are excessively high, unrealistic, or unattainable.

Conflict Trigger

An event, situation, or communication that initiates or escalates a conflict between individuals or groups.

Communication Breakdowns

Failures in communication processes, resulting in misunderstandings, errors, or conflict.