All of the Following Statements About Agency Problems Are True

question 64

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:

Random Selection

A method of selecting a sample from a population in a way that gives every member of the population an equal chance of being chosen.

Representative Sample

A subset of a population that closely mirrors the characteristics of the overall population, used in research to draw conclusions about the population as a whole.

Population

a group of individuals of the same species living in the same geographic area at the same time, capable of interbreeding.

Theoretical Perspectives

Frameworks or lenses through which scientists and researchers view, analyze, and interpret phenomena within a field of study.