In regard to the agency problem, ________ are the principal owners of a corporation.
A) shareholders
B) managers
C) employees
D) suppliers

Question

Quizplus · Accepted Answer

The agency problem arises due to the separation between ownership and control in a corporation. Shareholders are the principal owners of a corporation and hire managers to run the company on their behalf. The conflict of interest between shareholders and managers is an example of the agency problem, where managers may prioritize their own interests over those of the shareholders.

In Regard to the Agency Problem, ________ Are the Principal