Which of the following is the best example of an agency problem?

Question

Quizplus · Accepted Answer

An agency problem refers to a conflict of interest between shareholders and managers. In this case, the CEO is prioritizing their own self-interest over the interests of shareholders, which is a classic example of an agency problem.

Option B is an example of a potential conflict of interest, but it doesn't necessarily demonstrate an agency problem.

Option C is not an example of an agency problem because both the shareholders and the managers share the same goal of maximizing profits.

Option D is the opposite of an agency problem; the CEO is working in the best interest of the company, not prioritizing their own interests.

Which of the Following Is the Best Example of an Agency