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[6]. With a Subchapter 5 corporation A. income is taxed as direct income to stockholders. B. stockholders have the same liability as members of a partnership. C. the number of stockholders is unlimited. D. life of the corporation is limited. [7]. Agency theory examines the relationship between the A. shareholders of the firm and the firm's investment banker. B. owners of the firm and the managers of the firm. C. board of directors and large institutional investors. D. shareholders and the firm's transfer agent. [8]. Agency theory would imply that conflicts are more likely to occur between management and shareholders when A. the company is owned and operated by the same person. B. management acts in the best interests of maximizing shareholder wealth. C. the chairman of the board is also the chief executive officer (CEO). D. the board of directors exerts strong and involved oversight of management. [9]. Agency theory deals with the issue of A. when to hire an agent to represent the firm in negotiations. B. the legal liabilities of a firm if an employee, acting as the firm's agent, injures someone. C. the limitations placed on an employee acting as the firm's agent to obligate or bind the firm. D. the conflicts that can arise between the viewpoints and motivations of a firm's owners and managers. (10) The increasing percentage ownership of public corporations by institutional investors has A. had no effect on corporate management. B. created higher returns for the stock market in general. C. created more pressure on public companies to manage their firms more efficiently. D. Taken away the voice of the individual investor