Which of the Following Statements Is True About Takeover Constraint

question 40

Multiple Choice

Which of the following statements is true about takeover constraint?

• A) It encourages managers to put their own interests above those of stockholders.
• B) It usually occurs when the management has maximized the wealth of the stockholders.
• C) It often gives senior managers more independence when it comes to granting stock options.
• D) It has ceased to exist in companies since the late 1990s.
• E) It is the governance mechanism of last resort invoked only when the others have failed.

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Definitions:

Quality

The degree to which a product, service, or process meets specified standards or user expectations.

Offshoring

Moving operations from the country where a company is headquartered to a country where pay rates are lower but the necessary skills are available.

Psychological Contract

The unwritten set of expectations between an employer and employee regarding mutual obligations.