An agency issue is most apt to develop when:
A)a firm encounters a period of stagnant growth.
B)a firm downsizes.
C)the control of a firm is separated from the firm's ownership.
D)the firm's owner is also its key manager.
E)a firm is structured as a general partnership.

Question

Quizplus · Accepted Answer

An agency issue arises when there is a separation between ownership and control, leading to potential conflicts of interest between managers (agents) and shareholders (owners).

An Agency Issue Is Most Apt to Develop When