All else equal, in which of the following forms of business would the possibility of an agency problem be the greatest?
A. A U.S. corporation in which individual stockholders own extremely small proportions of the company.
B. A proprietorship in which the owner is actively managing the business operations.
C. A partnership in which all the partners share management and decision-making responsibilities equally.
D. A foreign corporation with concentrated ownership; that is, it has relatively few owners.
E. A U.S. corporation that gives company shares as incentives to its managers.
Answer: A
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