One reason for the existence of agency problems between managers and share holde

Question

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

A) managers know how to manage the firm better than shareholders.

B) there is a separation of ownership and control of the firm.

C) shareholders have unreasonable expectations about managerial performance.

D) none of these.

A) managers know how to manage the firm better than shareholders.

B) there is a separation of ownership and control of the firm.

C) shareholders have unreasonable expectations about managerial performance.

D) none of these.

Explanation / Answer

Hi,

Option B is the correct answer.

Thanks.

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