Which of the following statements is correct? Managers may operate in the stockholders' best interests, but they may also operate in their own personal best interests. As long as managers stay within the law, there simply are not any effective controls that stockholders can implement to affect managerial a.decision making. Given the multi-owner nature of most large corporations, the agency costs associated with perquisite consumption are not really b. a problem. The potential for agency problems is greatest when individual stockholders own extremely small proportions of the companies c. and managers have little, if any, of their own wealth tied up in these companies. d. Managers rule out any potential conflicts of interest with the shareholders by selling the firm's stock to outsiders. An agency relationship exists when one or more persons hire another person to perform some service but withhold decision- e.making authority from that person.
Which of the following statements is correct?
Managers may operate in the stockholders' best interests, but they may also operate in their own personal best interests. As long as managers stay within the law, there simply are not any effective controls that stockholders can implement to affect managerial
a.decision making.
Given the multi-owner nature of most large corporations, the agency costs associated with perquisite consumption are not really
b. a problem.
The potential for agency problems is greatest when individual stockholders own extremely small proportions of the companies
c. and managers have little, if any, of their own wealth tied up in these companies.
d. Managers rule out any potential conflicts of interest with the shareholders by selling the firm's stock to outsiders. An agency relationship exists when one or more persons hire another person to perform some service but withhold decision-
e.making authority from that person.
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