Which of the following forms of business organization is likely to suffer most from the principal agent problem between the owners and managers of the business?
A) proprietorships
B) partnerships
C) corporations
D) All are equally likely to suffer from the principal-agent problem.

Question

Quizplus · Accepted Answer

Corporations are most likely to suffer from the principal-agent problem because they have a separation between ownership (shareholders) and management, leading to potential conflicts of interest.

Which of the Following Forms of Business Organization Is Likely