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5.
Which of the following best describes the agency relationship in a business setting?
Group of answer choices
Stockholders are the agents of the bondholders.
Management is the agents of the employees.
Bondholders are the agents of management.
Management is the agents of the stockholders.
Stockholders are the agents of the employees. 6.
Which of the following best describes the financial link between stockholders and bondholders?
Group of answer choices
The action of stockholders cannot affect the financial position of bondholders.
The action of stockholders can increase the risk of a business which will affect the financial position of bondholders.
The action of bondholders can increase the risk of a business which will affect the financial position of stockholders.
The actions of stockholders and bondholders are independent.
Both a. and c. are correct.
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