Answered>Order 659

There can be agency conflicts between stockholders and managers as well as between stockholders (through managers) and creditors.  

Which of the following is correct?  

*A manager can avoid agency conflicts by retaining at least 51% of the firm’s common stock.

*Agency conflicts are avoided when the firm has under 10 employees.

*Creditors have no way of protecting themselves against overly risky investments that a company may make.

*Managers may make decisions that are in their own best interests rather than maximizing share price.

*None of the above