Which of the following is true of the Agency Problem?

A.

It may exist any time someone (the principle) hires someone else (the agent) to represent his or her interests.

B.

It can result when managers do not act in the interest of shareholders.

C.

The chance of an Agency Problem is increased the more closely the interests of managers and stockholders are aligned.

D.

Both A and B are true.

E.

None of the above is true.