All of the Following Statements About Agency Problems Are True

question 122

Multiple Choice

All of the following statements about agency problems are true EXCEPT

• A) Agency problems interfere with the goal of maximizing shareholder value.
• B) Agency costs are paid by the managers who do not act in the shareholders' best interest.
• C) Agency problems result from the separation of management and the ownership of a firm.
• D) The root cause of agency problems is conflicts of interest.

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Definitions:

Happy Hour

A promotional event typically held in bars and restaurants offering discounted prices on drinks and sometimes food during specific hours.

Market Competitiveness

A measure of a company's ability to compete in a particular market based on factors such as price, product quality, and customer service.

Market Growth Potential

The capacity for expansion or increased sales within a market, considering current trends and consumer demand.

Product Substitutes

Alternative goods or services that consumers can choose as replacements for another item, usually because they fulfill similar needs or functions.