For corporations, the principal-agent relationship usually refers to the relationship between:
A) buyers-sellers
B) owners-managers
C) manager-customer
D) owner-bankers

Question

Quizplus · Accepted Answer

The principal-agent relationship in corporations refers to the relationship between the owners (the principals) and the managers (the agents) who are hired to run the company on behalf of the owners. This relationship is important because the owners want to ensure that the managers act in their best interests and maximize the value of the company, while the managers may have different goals or interests that could lead to conflicts with the owners.

For Corporations, the Principal-Agent Relationship Usually Refers to the Relationship