The principal-agent problem arises because: Select one: a. the agent wants to maximize the company's profit and stock prices while the owners want power and prestige. b. the owners want expensive office building while the agent wants to maximize the Company's profit. c. of the conflict of interest that occurs when principals pursue their own objectives to the detriment of the agent. d. the owners want to maximize company's profit and stock prices while the agent wants power and prestige. e. the stock holders have unlimited liability in case of a loss while the agent does not.
The principal-agent problem arises because: Select one: a. the agent wants to maximize the company's profit and stock prices while the owners want power and prestige. b. the owners want expensive office building while the agent wants to maximize the Company's profit. c. of the conflict of interest that occurs when principals pursue their own objectives to the detriment of the agent. d. the owners want to maximize company's profit and stock prices while the agent wants power and prestige. e. the stock holders have unlimited liability in case of a loss while the agent does not.
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter21: Getting Employees To Work In The Firm’s Best Interests
Section: Chapter Questions
Problem 4MC
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The principal-agent problem arises because:
Select one:
a. the agent wants to maximize the company's profit and stock prices while the owners want power and prestige.
b. the owners want expensive office building while the agent wants to maximize the Company's profit.
c. of the conflict of interest that occurs when principals pursue their own objectives to the detriment of the agent.
d. the owners want to maximize company's profit and stock prices while the agent wants power and prestige.
e. the stock holders have unlimited liability in case of a loss while the agent does not.
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