Agency Theory in Firms Suggests That

Agency theory in firms suggests that:

A) owners of firms want to pursue risk-adverse policies to stabilize the firm's cash flow and increase the value of their ownership interests.
B) managers who hold stock in their firms will not pursue hedging opportunities because hedging minimizes risk and managers want higher earnings so that their compensation will increase.
C) managers who hold stock in their firms will pursue risk-adverse policies to reduce volatility of the firm's cash flow.
D) owners will want to pursue hedging strategies to safeguard the values of their investments in the firm.