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.

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Definitions:

Dramaturgy

A sociological perspective that views social interactions as analogous to actors performing on a stage.

Cultural Conflicts

Disagreements or discord resulting from differences in beliefs, values, and practices between cultures.

Phenomenologists

Researchers or philosophers who study the structures of experience and consciousness from a first-person perspective.

Deviance

refers to behaviors or actions that violate social norms or values.