The Conflict of Interest Between Management and Stockholders Is Known

question 136

Multiple Choice

The conflict of interest between management and stockholders is known as:

• A) the stockholder/management problem.
• B) the management problem.
• C) the agency problem.
• D) a problem relating to excess compensation.

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Definitions:

Break-Even Point

The point at which the number of units sold generates just enough revenue to equal the total costs; at this point, profits are zero.

Profit

The financial gain realized when the amount of revenue earned from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Profit Margin

The amount by which revenue from sales exceeds costs in a business, expressed as a percentage.

Sales-Oriented

A business approach focused primarily on generating sales regardless of customer needs or the longer-term company interests.