Multiple Choice
Which of the following must a principal do to reduce agency costs?
A) Encourage the agent to maximize his/her benefits.
B) Provide complete autonomy to the agent.
C) Discourage the agent from pursuing projects with high potential payoffs.
D) Increase information asymmetry and goal congruence.
E) Align the agent's interests with the principal's interests.
Correct Answer:
Verified
Correct Answer:
Verified
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