A) The advertising agency that a company uses produces top quality materials and charges a high price for its work.
B) A not-for-profit environmental agency stages a protest.This results in negative attention to a company's manufacturing methods.
C) A company's board, in wanting to protect board member compensation, agrees with everything company management suggests.
D) A hiring agency screens out potential applicants to a company's job posting.
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One type of agency relationship arises w...View Answer
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A) A corporation is easy to set up.
B) Corporate tax laws are often less attractive than personal tax laws.
C) Shareholders' liability is limited to their investment in the corporation.
D) In a sole proprietorship, it is easier to transfer ownership.
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A) Long-term Debt
B) Cash
C) Accounts Payable
D) Inventory
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A) difficulties arising in dealings with real estate agencies.
B) problems arising due to potential misalignment between the interests of owners, creditors, and managers.
C) problems arising due to the complete alignment of the interests of owners, creditors, and managers.
D) issues surrounding whether or not to outsource production to an external agency.
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A) Maximize the profit margin.
B) Avoid bankruptcy.
C) Increase market share.
D) Maximize the company's market share price.
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A) Shareholders are always richer than managers, and can afford to take more risk.
B) Shareholders can diversify risk by holding many securities, while a manager's career is tied up with the firm.
C) Because they are investing in the stock market, shareholders must naturally prefer taking more risk than managers.
D) Managers do not like risk because it hurts the value of the company.
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A) The plans encourage managers to invest in the stock market.
B) The plans are meant to align the interests of management and shareholders.
C) The plans encourage managers to give shares as incentives for employees.
D) all of the above
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