One reason for the existence of agency problems between managers and share holders is that

Question

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The separation of ownership and control of the firm creates a situation where managers may not act in the best interest of shareholders, leading to agency problems. Managers may prioritize their own interests or maximize their own utility instead of maximizing shareholder value. This can lead to conflicts of interest and a misalignment of incentives between managers and shareholders. Choices B and C are incorrect because they do not address the underlying issue of the separation of ownership and control.

One Reason for the Existence of Agency Problems Between Managers