An agency problem exists between stockholders and managers. A second agency problem arises between stockholders and creditors.

Name: An agency problem exists between stockholders and managers. A second agency problem arises between stockholders and creditors.
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Question

Quizplus · Accepted Answer

The first part of the statement is true as an agency problem does exist between stockholders and managers. The second part of the statement is also true as stockholders may take actions that benefit them but negatively affect creditors.

An Agency Problem Exists Between Stockholders and Managers