Question

What are examples of a possible result of the conflict of interest between shareholders and corporate...

What are examples of a possible result of the conflict of interest between shareholders and corporate managers?

Check all that apply:

Managers funding risky projects that could lose money.

Managers using company resources for personal benefit.

Managers paying themselves excessive salaries.

Managers faking earnings to temporarily boost the stock price.

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Answer #1

Managers funding risk projects that could lose money :- this may not arise a conflict of interest as investment in projet will be made with an intention to generate better revenue and profit. Sometimes profit may turn to loss lead to lose money.

Mangers using company resources for personal benefit - there arise a conflict of interest as company ( shareholders) money shouldn't be used for personal benifits.

Managers paying themselves excessive salaries - will lead to conflict of interest as company or shareholders money is used for paying excess salaries without authorization.

Managers faking earnings to temporarily boost share price - Conflict of interest will arise as the managers are boosting the fictitious profits for showing the Company actual price incorrect.

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