Which one of the following statements is TRUE?
A) A manager/shareholder agency conflict arises when the manager's actions aren't in the company's best interest.
B) An agency problem occurs when an owner/manager sells stock to an outside investor and the owner/manager fears the outside investor will consume too many perquisites.
C) An agency conflict between inside owners/managers and outside owners occurs when the outside owners sell their shares to someone else.
D) A quarter-end bonus is an example of a nonpecuniary benefit.
E) A company's matching contribution to a retirement plan is a nonpecuniary benefit.

Question

Quizplus · Accepted Answer

A manager/shareholder agency conflict is a situation in which a manager prioritizes their own interests over the interests of the shareholders they represent. This could occur if the manager makes decisions that benefit themselves more than they benefit the company, such as allocating resources towards a project that they are personally invested in instead of towards a project that would benefit the company overall.

Which One of the Following Statements Is TRUE