The Principal-Agent Problem Arises

question 20

Multiple Choice

The Principal-Agent Problem arises:

• A)because managers have little incentive to work in the interest of shareholders when this means working against their own self-interest.
• B)because of the separation of ownership and control in a corporation.
• C)Both A and B
• D)None of the above

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Definitions:

Writing

The act or skill of composing text for the purpose of communication or expression.

Decoding

Process of phonetic analysis by which a printed word is converted to spoken form before retrieval from long-term memory.

Encoding

Process by which information is prepared for long-term storage and later retrieval.

Print

To produce text or images on paper or other materials using a machine such as a printer, or the text and images produced in this way.