Which of the Following Is an Example of an Agency

question 4

Multiple Choice

Which of the following is an example of an agency problem?

• A)managers not working as diligently if they are not the sole owner of the business
• B)the board of directors firing an incompetent manager
• C)the manager owning a great deal of stock in the company
• D)a corporate raider attempting to purchase the company
• E)managers using cash to increase dividends

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Definitions:

Nonprofit Sector

The segment of society that comprises organizations primarily focused on philanthropic goals, community service, or providing noncommercial services.

Profit

The financial gain obtained when the amount earned from a business activity exceeds the expenses, costs, and taxes.

Salamon's Anatomy

A comprehensive framework or study by Lester Salamon that categorizes and analyzes the structures and functions of the nonprofit sector.

Nonprofit Organizations

Entities that are dedicated to furthering a social cause or shared goal without the intention of distributing profits to members or leaders.