Which one of the following is NOT an example of the agency problem?

Question

Quizplus · Accepted Answer

Increasing the level of debt of the company to increase the return on equity value is not an example of the agency problem as it is a legitimate financial strategy to increase shareholder value. The agency problem arises when managers prioritize their own interests over the interests of shareholders, such as in options B and D, or when they try to maintain their power and control over the company, as in option A.

Which One of the Following Is NOT an Example of the Agency