An issue or conflict that arises due to potential divergence of interest between managers, shareholders, and creditors is best described as a(n):
A) agency problem.
B) business problem
C) personal problem.
D) employment problem.

Question

Quizplus · Accepted Answer

Agency problem arises when there is a conflict of interest between the needs or desires of the principal (such as shareholders or creditors) and the agents (such as managers) who are supposed to act on the principal's behalf.

An Issue or Conflict That Arises Due to Potential Divergence