Which theory states that the recognition that those who own firms and manage them are now separated, and thus the agents may act in their own best interest rather than that of the firm?
A) Agency theory
B) Contract theory
C) M&A theory
D) Attribution theory

Question

Quizplus · Accepted Answer

The agency theory highlights the separation of ownership and management in modern firms. It suggests that agents (managers) may act in their own self-interest instead of working in the best interest of the firm's owners (shareholders), which can lead to conflicts between the two parties.

Which Theory States That the Recognition That Those Who Own