An Agency Problem Can Be Alleviated By

question 20

Multiple Choice

An agency problem can be alleviated by:

• A)requiring all firms to be sole proprietorships.
• B)compensating managers in such a way that acting in the best interest of shareholders is also in the best interest of managers.
• C)asking managers to take on more risk than they are comfortable taking.
• D)A and B.

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Definitions:

Assignee

An individual, group, or legal entity to which rights or interests have been transferred by another, known as the assignor.

Assigned Rights

Assigned rights involve the transfer of rights or duties under a contract from one party to another, not transferring the entire contract but specific benefits.

Contractual Obligations

Duties that are legally required to be fulfilled under the terms of a contract.

Assignment Protocol

Assignment Protocol is a set of rules or procedures designated for assigning tasks, responsibilities, or resources in an organized manner.