Which of the following would be best considered to be an agency conflict problem in the behavior of the following financial managers?

Question

Quizplus · Accepted Answer

Bill's decision to pursue a risky investment solely for personal gain creates a conflict of interest between his own goals and those of the company's shareholders. This is an example of an agency conflict problem.

Answer: B
 Sue's decision to skip safety inspections poses a risk to the company's reputation, as well as potential legal and financial liabilities. This is an example of unethical behavior rather than an agency conflict problem.

Answer: C
 James' decision not to invest in a new drug may be a result of risk management or strategic decision-making, rather than a conflict of interest between his own goals and the company's shareholders. This is not an example of an agency conflict problem.

Answer: D
 Michael's decision to sponsor a team of athletes for the Special Olympics may enhance the company's reputation and goodwill, but it may also come at a cost to its shareholders. This is an example of a potential agency conflict problem, as Michael is prioritizing the company's social responsibility over its financial objectives.

Which of the Following Would Be Best Considered to Be