The shareholders of Weil's Markets would benefit if the firm were to be acquired by Better Foods.However, Weil's board of directors rejects the acquisition offer.This is an example of:
A)a corporate takeover.
B)a capital structure issue.
C)a working capital decision.
D)an agency conflict.
E)a compensation issue.

Question

Quizplus · Accepted Answer

This situation exemplifies an agency conflict, where the interests of the board of directors (agents) do not align with those of the shareholders (principals), who would benefit from the acquisition.

The Shareholders of Weil's Markets Would Benefit If the Firm