Conﬂicts of interest between shareholders and bondholders are known as:
A)trustee costs.
B)ﬁnancial distress costs.
C)dealer costs.
D)agency costs.
E)underwriting costs.

Question

Quizplus · Accepted Answer

Conflicts of interest between shareholders and bondholders are known as agency costs, which arise due to the potential for managers to prioritize the interests of shareholders at the expense of bondholders. This can lead to actions that increase shareholder value but may harm the financial position of bondholders. Trustees, dealer, financial distress, and underwriting costs all refer to different types of costs or fees associated with financial transactions or management, and are not directly related to conflicts of interest between shareholders and bondholders.

Conﬂicts of Interest Between Shareholders and Bondholders Are Known As