A Disadvantage of Using Stock Options to Compensate Managers Is

question 40

Multiple Choice

A disadvantage of using stock options to compensate managers is that

• A) it encourages managers to undertake projects that will increase stock price.
• B) it encourages managers to engage in empire building.
• C) it can create an incentive for managers to manipulate information to prop up a stock price temporarily, giving them a chance to cash out before the price returns to a level reflective of the firm's true prospects.
• D) All of the above.

---

Definitions:

Bartering Psychotherapy

An arrangement where psychological counseling services are provided in exchange for goods or services from the client, instead of traditional monetary payment.

Unethical

Actions or behavior that violate professional standards, ethical codes, or moral principles.

Conflicts

Situations in which there are opposing ideas, interests, or needs, leading to discord or disagreement.

Boundary Crossings

Actions by professionals that deviate from established norms or ethical guidelines in a context that may harm or confuse clients but can sometimes be therapeutically intended.