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Agency theory is concerned with resolving two problems that can occur in agency relationships. Which of the following is not one of those problems?
A. Principals and agents have differing attitudes toward risk
B. Stockholders & mgt align with external stakeholders
C. Verification of actual agency activity is expensive and difficult to obain
D. Goals conflict between principals and agents


Sagot :

The following is not one of those problems Principals and agents have differing attitudes toward risk. Option A.

In agency theory, managers are agents and shareholders are principals. This theory holds that unless appropriate incentives or supervision are effective enough to discourage corporate managers from using their own discretion to maximize their utility, they will maximize the value of the firm.

Agency theory deals with disputes that arise primarily in two key areas. Different goals or different risk aversion. Management may want to expand the business into new markets with a focus on short-term profitability and higher compensation prospects. Problems arise when one party directs another party to make decisions and act on their behalf.

Learn more about Agency theory here:- https://brainly.com/question/26253714

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