Among the most important agency relationships in the context of finance is (are) the relationship(s) between ____.
A) stockholders and creditors
B) management and workers
C) stockholders and creditors, and management and workers
D) management and creditors

Question

Quizplus · Accepted Answer

The agency relationship in finance primarily refers to the relationship between stockholders (principals) and management (agents), where management is expected to act in the best interest of the stockholders. However, in the context of the given options, the relationship between stockholders and creditors is crucial as both parties have different interests in the financial decisions of a company.

Among the Most Important Agency Relationships in the Context of Finance