The best example of an agency problem is
A)an argument between two managers about a late check-out.
B)lenders disagreeing with hotel owners about dividend payments.
C)two employees disagreeing about proper table service.
D)the maintenance manager arguing with the housekeeping manager about an out-of-order room.

Question

Quizplus · Accepted Answer

An agency problem occurs when there is a conflict of interest between the owners of a company and the managers who run it. In this case, the lenders (who are the owners in this case) may want the hotel owners to use the profits to pay off debts, while the owners may want to use the profits to pay themselves dividends. This creates a conflict that is typical of agency problems. The other options do not involve conflicts of interest between owners and managers.

The Best Example of an Agency Problem Is