alleryStart learning →In the shareholder and management agency problem, who is the agent?
AThe shareholders
BBond creditors
CCorporate managers
DExternal auditors
Answer & Solution
Correct answer: C. Corporate managers
Shareholders are the principals and the managers who act for them are the agents.
Keep practising Financial Management
Browse all Financial Management questions for CA Inter, or explore more Financial Management topics.
Related questions
The cash conversion cycle measures which risk entailed by growth?A negative cash conversion cycle means a firm collects from customers?Inventory period is 45 days and receivables period is 30 days. The operating cycle is?In common law jurisdictions, to whom do directors owe fiduciary duties?Mandatory audits of financial statements help reduce what?Which pay design best aligns managers with the owners' interests?A manager who expands firm size instead of profits is engaged in what?The loss when an agent acts against the principal's interest is called what?