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Question 5 1 pts In a corporate (form) business entity the agency problem is described as the potential for conflict between two parties the principals (outside shareholders) and the companys customers O True False

Question 6 2 pts . Which of the following are possible mechanisms applicable to large corporations that motivate managers to act in the best interests of the shareholders? O a. Managerial compensation (incentives) O b. Shareholder intervention c. Threat of a takeover by an outside entity d. All of the above

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Question – 5 : statement is False. Agency problem is conflict of interest between company’s shareholder and company’s management (not the customer).

Question – 6 : Correct option is d. All the above

explanation : All the 3 measure will help to motivate manager to protect interest of stakeholder.

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