The Management of XYZ Corporation Is Considering Acquiring Another Firm

Multiple Choice

The management of XYZ Corporation is considering acquiring another firm in an effort to expand the company. Stockholders of XYZ feel that the company is big enough and does not need to expand. This is an example of:

A) the principal-agent problem.
B) the principal problem.
C) asymmetric information.
D) skin-in-the-game.