Which of the Following Is Not a Component of the Solution

question 146

Multiple Choice

Which of the following is not a component of the solution to the agency problem?

• A) Ensure that shareholders are involved in the day-to-day operations of the firm.
• B) Ensure that corporate resources and profits are not squandered.
• C) Ensure that executives will not make choices that benefit themselves at the shareholders' expense.
• D) Ensure that shareholders will receive a positive return on their investments.

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Definitions:

Third Parties

Individuals or entities that are not directly involved in a contract or legal agreement but may be affected by its outcome.

Ultramares Rule

A legal doctrine determining the liability of accountants for negligence to third parties who rely on their financial reports.

Work Product

Documents, materials, or information prepared in anticipation of litigation, protected from discovery by opposing counsel.

Limited Class

A category with restrictions in terms of the number or type of members it can include, often used in legal contexts or when issuing securities.