Agency theory can best be described as:
A. The relationship between top management and the board of directors
B. The relationship between the board of directors and shareholders
C. The relationship between top management, the board of directors, and shareholders
D. The relationship between the external auditors and top management
C. The relationship between top management, the board of directors, and shareholders
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Which of the following is true for employees who represent a company to stakeholders and other members of the public?
A) Communication style should be relaxed. B) Communication style should be reflective of the person communicating. C) Communication should be scripted without deviation. D) Communication should be handled consistently regardless of audience. E) Communication should be based on predetermined guidelines set up by the organization.
The investment opportunity schedule (IOS) plotted on a graph shows:?
A. ?the optimal components for capital financing for a firm. B. ?the amount of investment at different rates of return for a firm. C. ?the net present values of different projects of a firm. D. ?the average cost of capital of a firm. E. ?the marginal increase in the weighted average capital due to change in capital components.
Cost-plus pricing is popular in periods of rapid inflation.
Answer the following statement true (T) or false (F)
The pecking-order model of capital structure suggests the order in which firms prefer to raise capital is:
A) debt, then retained earnings, then external equity. B) retained earnings, then debt, then external equity. C) preferred stock, then debt, then external equity. D) debt, then external equity, then retained earnings.