The Principal-Agent Problem of Ownership Vs

question 89

Multiple Choice

The principal-agent problem of ownership vs. control of the corporation tends to get worse when:

• A) stock in a corporation is held exclusively by a small number of people who control the company's day-to-day operations.
• B) stock in the company is tightly held, but there are some "outsider" stockholders.
• C) stock in the company is very diffusely held, with no individual or group having control over a large block of stock.
• D) managers have profit-sharing schemes as part of their incentive package.
• E) managers focus on maximizing the firm's profits, rather than the firm's market share.

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Definitions:

Driving Accident Rates

The frequency or proportion of collisions involving motor vehicles within a given time frame or geographical area.

Metabolic Rates

The rate at which the body expends energy or burns calories, crucial for maintaining basic physiological functions and supporting activity.

Sleep Apnea

A sleep-related disorder defined by the occurrence of breathing pauses or periods of minimal breathing.

Cortisol Levels

The concentration of cortisol, a steroid hormone, in the blood, which can indicate stress or adrenal function.