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QUESTION 4 Which of the following statements regarding agency problems and costs are correct? I. An agency problem exists when there is a conflict of
QUESTION 4 Which of the following statements regarding agency problems and costs are correct? I. An agency problem exists when there is a conflict of interest between the stockholders and the management of a firm. II. An agency problem exists when there is a conflict of interest between a principal and an agent. III. An agency cost occurs when firm management avoids risky projects that would favorably affect the stock price because the managers are worried about keeping their jobs. IV. An agency cost occurs when management chooses an action that benefits the shareholders but reduces management compensation. 10 points Save A
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