Which one of the following is most likely to create a situation where an agency conflict could arise?
A)increasing the size of a firm's operations
B)downsizing a firm
C)separating management from ownership
D)decreasing employee turnover
E)reducing both management and non-management salaries

Question

Quizplus · Accepted Answer

Separating management from ownership creates a situation where the managers may have different goals and objectives than the owners, leading to a potential agency conflict. The managers may prioritize their own interests over those of the owners, which could harm the value of the company. The other options do not necessarily create a conflict of interest between the managers and the owners.

Which One of the Following Is Most Likely to Create