Question 70

Which of the following is a conclusion of agency theory?

A. Managers may accept excessive financial risks to increase the returns to shareholders.

B. Managers tend to avoid high-risk, high-return investments that may jeopardize their positions if successful.

C. Managers will always use the least expensive source of funds to finance investments.

D. Managers will tend to put the stockholders interests before their own security and ambitions.

BAM313 - INTRODUCTION TO FINANCIAL MANAGEMENT