Which among the following statements is INCORRECT regarding agency costs? a. The reason for agency problems is conflicts of interest between the stockholders and the management of a firm. b. Agents represent the management; however, their decisions are influenced by their interests in the company. c. A corporate expenditure that benefits stockholders but harms management is an agency cost. d. When confronted with higher agency costs, shareholders resort to replacing the existing management. e. None of the above.

Which among the following statements is INCORRECT regarding agency costs? a. The reason for agency problems is conflicts of interest between the stockholders and the management of a firm. b. Agents represent the management; however, their decisions are influenced by their interests in the company. c. A corporate expenditure that benefits stockholders but harms management is an agency cost. d. When confronted with higher agency costs, shareholders resort to replacing the existing management. e. None of the above.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter1: Accounting As A Tool For Managers

Section: Chapter Questions

Problem 10MC: Which of the following statements is incorrect? The practice of management accounting is fairly...

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