Which of the following statements is correct?
A)A good goal for a firm's management is maximization of expected EPS.
B)Like corporations, the board of directors for an income trust supervises the operating entity on behalf of unitholders.
C)There is a legal obligation to pay cash distributions for income trusts.
D)Agency conflicts easily arise between shareholders and managers.

Question

Quizplus · Accepted Answer

Agency conflicts easily arise between shareholders and managers. This is because shareholders entrust their capital to managers to run the company, but the managers may have different goals and objectives, leading to conflicts of interest.

Which of the Following Statements Is Correct