In corporate agency theory, managers are __________, and owners are __________.
A) Bondholders, shareholder.
B) Shareholder, bondholders.
C) Agents, principals.
D) Principals, agents.
E) Agents, contractors.

Question

Quizplus · Accepted Answer

In corporate agency theory, managers act as agents who are employed to act on behalf of the owners, who are the principals. This relationship is based on the idea that managers (agents) are tasked with making decisions in the best interest of the owners (principals).

In Corporate Agency Theory, Managers Are __________, and Owners Are