Question

under what circumstance would agency conflict be most likely to increase?
when the incentives of a manager align with those of owners.
when owners are separated from the business.
when owners are very close to the business.
when oversight by the board is adequate.

Explanation:

Agency conflict arises from the separation of ownership (shareholders) and control (managers). When owners are separated from the business, managers may make decisions that prioritize their own interests over owners' interests, increasing agency conflict. Aligned incentives, close owner involvement, and adequate board oversight reduce conflict.

Answer:

B. When owners are separated from the business.