The Agent Problem arises: A. Because of the separation of ownership and control in a corporation...

The Agent Problem arises:

	A.	Because of the separation of ownership and control in a corporation
	B.	Because managers have little incentive to work in the interest of shareholders when this means working against their own interests
	C.	Both A and B
	D.	None of the above

Expert Solution

The correct answer is the third option i.e. option C. Both A & B

Both the reasons stated in the question are the reasons behind the agency problem.

jeff jeffy answered 2 years ago

The professional management policies that result from the separation of ownership and control are considered to...

The professional management policies that result from the separation of ownership and control are considered to be a strength of firms held in the portfolio of private equity partnerships. (True or False)?

Some argue that the Anglo-American separation of ownership and control is an inevitable outcome in corporate...

Some argue that the Anglo-American separation of ownership and control is an inevitable outcome in corporate governance. Others contend that this is one variant (among several) on how large firms can be effectively governed and that it is not necessarily the most efficient form. What do you think?

PROBLEM 1 Match the internal control in the first column with Applicable control activities Adequate separation...

PROBLEM 1 Match the internal control in the first column with Applicable control activities Adequate separation of duties Adequate documents and records Proper authorization of transactions Physical controls over assets and documents Independent checks on performance Transaction related audit objective (not-assigned, for class discussion only) INTERNAL CONTROL a. CONTROL ACTIVITY b. TRANSACTION- RELATED AUDIT OBJECTIVE(S) 1. Sales invoices are matched with shipping documents by the computer system and an exception report is generated. 2. Receiving reports are prenumbered and accounted...

The principle-agent problem:

The principle-agent problem: prevents managers from exercising their best managerial judgement describes the inability of lenders to discern between good and bad credits. is completely solved by venture capital firms and their approaches to financing firms. can be solved by due diligence before providing funding. None of the other answers.

The lemon's problem is a moral hazard problem and the principle agent problem is an adverse...

The lemon's problem is a moral hazard problem and the principle agent problem is an adverse selection problem. True False

TRUE/FALSE 1.) Asymmetric distribution of phospholipids in the bilayers of cell membranes arises because phospatidylcholine and...

TRUE/FALSE 1.) Asymmetric distribution of phospholipids in the bilayers of cell membranes arises because phospatidylcholine and sphingomyelin spontaneously translocate from the cytoplasmic to the extracytoplasmic face of the membrane. 2.) The carbohydrate headgroups in glucosyl ceramide, lactosylceramide, and ganglioside are all attached to ceramide via a phosphoryl group.

Separation Process: Consider the in-class demonstration problem involving the MeOH/water separation. Suppose that a saturated steam...

Separation Process: Consider the in-class demonstration problem involving the MeOH/water separation. Suppose that a saturated steam feed was injected into the bottom of column (it is sparged to get good contact with the liquid that is falling down from the tray above its entrance). Take the specifications for the feed to be identical as in the McCabe-Thiele demonstration done in class (zF = 0.36, F = 216.8 kmol/h). Further, the compositions of the distillate and the bottoms should be the...

1. The problem that insurance displays is the _______________ where their is a separation between the...

1. The problem that insurance displays is the _______________ where their is a separation between the person paying the and the person demanding. a. Principle Problem b. lack of the law of Demand c. Comparative Advantage Problem d. Principle Agent Problem 2. In order for the pre-existing conditions waiver to work (that is that insurance companies can't deny coverage for pre-existing conditions) the ACA designers had to a. subsidize the insurance companies for the length of the insured lives b....

Because of seasonal fluctuations, Noble Corporation has a problem determining the unit cost of the products...

Because of seasonal fluctuations, Noble Corporation has a problem determining the unit cost of the products it produces. For example, high heating costs during the winter months causes per-unit cost to be higher than per-unit cost in the summer months even when the same number of units of product is produced. Suggest several ways that Noble can improve the computation of per-unit costs.

At Leah Company, cheques are not prenumbered because both the purchasing agent and the treasurer are...

At Leah Company, cheques are not prenumbered because both the purchasing agent and the treasurer are authorized to issue cheques. Each signer has access to unissued cheques kept in an unlocked file cabinet. The purchasing agent pays all bills pertaining to goods purchased for resale. Prior to payment, the purchasing agent determines that the goods have been received and verifies the mathematical accuracy of the vendor’s invoice. After payment, the invoice is filed by vendor, and the purchasing agent records...

Question