Emerging trends resulting from the agency problem are all of the following EXCEPT
A) large private corporations.
B) restructuring through leveraged buyouts.
C) management by active investors.
D) prohibiting managers from maintaining an ownership interest.

Question

Quizplus · Accepted Answer

Prohibiting managers from maintaining an ownership interest is not an emerging trend resulting from the agency problem. In fact, most companies encourage their managers to hold an ownership interest as a way to align their interests with those of the shareholders. The other three choices are emerging trends resulting from the agency problem, with large private corporations and management by active investors being alternative structures to offer better governance, and restructuring through leveraged buyouts being a way to transfer ownership and control to more motivated buyers who would solve the agency problem.

Emerging Trends Resulting from the Agency Problem Are All of the Following