The conflict of interest between stockholders and management is known as:
Correct answer: A. Agency problem
- A. Agency problem
- B. Interest conflict
- C. Management conflict
- D. Agency costHire An Accountant
Explanation
The agency problem arises when managers, acting as agents, pursue interests that differ from those of stockholders, the owners. Agency costs are the expenses incurred to reduce or monitor this conflict, not the conflict itself.
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