Question
Which of the following is not true? Group of answer choices The agency problem arises when the principal (i.e. the employer) hires someone to do
Which of the following is not true?
Group of answer choices
The agency problem arises when the principal (i.e. the employer) hires someone to do certain job for him/her, and the employed person has an incentive to act in a manner that will hurt the principal's (employer's) interests.
After lending money to the firm, the debtholders do not get any ownership interests in the firm in exchange of the money they lent.
All shareholders have the same influence in the firm's decision-making regardless of how many shares each person has. That is, each shareholder has the same say in the firm's decision-making no matter how much they invested in it.
Generally, debtholders have a higher priority over equity holders in liquidating the firm's assets (or going after the firm to recover its money) in case the firm goes bankrupt.
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