________ is the term used to describe a situation where the interests of the shareholders conflict with the senior managers who have been hired to run the company.

Question

Quizplus · Accepted Answer

The term used to describe a situation where the interests of the shareholders conflict with the senior managers who have been hired to run the company is known as the agency problem. This arises due to the separation of ownership and management in a corporation. Shareholders entrust their capital to managers who are expected to utilize it wisely to maximize shareholder value. However, managers may have their own interests, which may not align with those of the shareholders, leading to conflicts of interest.

________ Is the Term Used to Describe a Situation Where