Final answer:
An agency problem refers to situations where the interests of managers may not align with the interests of the shareholders or owners of a company. It can manifest in various ways, such as empire building, avoiding risky projects, or over consuming luxuries. D. All of these options are examples of agency problems.
Step-by-step explanation:
An agency problem refers to situations where the interests of managers (agents) may not align with the interests of the shareholders or owners (principals) of a company. One example of an agency problem is when managers engage in empire building, which means they focus on expanding the size or influence of their department or division to gain more power or resources, even if it's not in the best interest of the company. Another example is when managers protect their jobs by avoiding risky projects, which can limit opportunities for growth and innovation within the company. Additionally, managers over consuming luxuries such as corporate jets can be seen as an example of misusing company resources for personal gain.
Therefore, the correct answer to the question is D. All of these options are examples of agency problems.