The conflict resulting from a manager's desire to increase the firm's risk without increasing currentborrowing costs and a lenders' desire to limit lending is one effect of the_________problem.
A) agency
B) capital
C) variable cost
D) leverage

Question

Quizplus · Accepted Answer

This conflict is an example of an agency problem, where the interests of the managers (agents) may not align with those of the lenders (principals).

The Conflict Resulting from a Manager's Desire to Increase the Firm's