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1. Which of the following statements is/are consistent with publicly traded comp

ID: 1243371 • Letter: 1

Question

1. Which of the following statements is/are consistent with publicly traded companies? a.) there is a separation of ownership from control b.) shareholders may incur monitoring costs c.) there is a potential for moral hazard d.) all of the above 2. In the context of the agent-principal problem, what term is used to refer to the costs incurred by principals to attempt to ensure that their agents are acting in the principals' best interests? a.) sunk costs b.) variable costs c.) long-run average costs d.) monitoring costs

Explanation / Answer

b.) shareholders may incur monitoring costs c.) long-run average cost