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Consider the following scenario and determine whether an agency conflict exists: Five years ago, Caesar created a plant-care business that grew, stocked, and maintained fresh

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Consider the following scenario and determine whether an agency conflict exists: Five years ago, Caesar created a plant-care business that grew, stocked, and maintained fresh plants in office buildings throughout Raleigh. Over time, The Green Zone Inc. (TGZ) has grown from a proprietorship into a corporation, now reaching far beyond Raleigh. To finance and support this growth, TGZ issued shares that were sold to TGZ employees, Caesar's family members, and selected outsiders. Caesar is TGZ's chairman of the board of directors and CEO, but he is no longer the largest shareholder At the latest annual meeting, two mutually exclusive proposals were placed on the ballot for discussion and vote. The first was put forth by Caesar and TGZ's management team, and the second was proposed by a small group of other shareholders. Both groups are adamantly opposed to the other group's proposal, even though both proposals would likely have the same effect on TGZ's value and riskiness. Does an agency conflict exist between TGZ's management and the small group of opposing shareholders? O No; Caesar was the original owner of TGZ, so he would always be sensitive to the concems of the firm's current owners (shareholders) and would not engage in an agency conflict O No; although an agency relationship exists between TGz's management-including Caesar as TGZ's chairman and Ceo and the fim's shareholders there is no agency confict, because no expropriation or wasting of the shareholders' wealth has occurred O Yes any conflict or disagreement between the fim's managers and its shareholders constitutes an agency conflict O Yes; an agency relationship exists, and an agency relationship always gives rise to agency conflicts, regardless of the actuai behavior of the participants

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