Which one of these is most apt to be an agency problem?
A)Increasing the dividend payments to shareholders
B)Paying off debt in a timely manner
C)Increasing the sales of a profitable division
D)Forsaking a profitable project because it involves some risk
E)Selling an unprofitable division of the firm

Question

Quizplus · Accepted Answer

Forsaking a profitable project because it involves some risk can be an agency problem as managers may prioritize their own risk aversion over the best interests of the company and its shareholders. This could lead to missed opportunities for growth and profitability.

Which One of These Is Most Apt to Be an Agency