Who is more likely to indulge in wasteful behavior?Multiple choice question.A manager with a large ownership interest in the firmA manager with a small ownership interest in the firm

Why is a manager with a small ownership interest in the firm more likely to indulge in wasteful behavior?Multiple choice question.The manager with a small ownership interest has a longer tenure with the firm.The manager bears only a small fraction of the costs but enjoys all the benefits.The manager with a small ownership interest is not monitored by the firm.The manager bears a large fraction of the costs but enjoys an insignificant portion of the benefits.

Which of the following is not identified as one of the major problems that can arise in owner-manager agency relationships?Group of answer choicesRisk aversion.Horizon problems.Reduced incentives.Dividend retention.

An agency problem can be alleviated:a.when a firm is a sole proprietorship.b.by compensating managers in such a way that acting in the best interest of shareholders is also in the best interest of managers.c.by asking managers to take on more risk than they are comfortable taking.d.a) and b)e.a), b), and c)

Which of the following statement is true?Question 2Select one:a.The conflict of interests between the goals of the firm’s owners and those of its managers is the agency problem.b.With their management contracts, the managers have the incentive to act in the best interests of the shareholders.c.The firm’s owners will always act in the best interests of the managers d.Two of the three statements are truee.All three statements are true

Which type of firm is more susceptible to selfish shareholder strategies?Multiple choice question.An all-equity firmA levered firm facing financial distressA financially healthy firmA firm not listed on a stock exchange