Methods to Minimize Agency Problem Include All EXCEPT

question 16

Multiple Choice

Methods to minimize agency problem include all EXCEPT

• A) offer the managers an equity stake in the firm.
• B) award the CEO stock options.
• C) allow the CEO to purchase stock via an employee stock option plan.
• D) allow the CEO to purchase bonds via an employee bond option plan.

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Definitions:

Factor Analysis

An analytical approach employed to account for the variability in observed, interconnected variables through fewer, unseen variables referred to as factors.

Bivariate Approach

A statistical or research method that involves the analysis of two variables to determine the empirical relationship between them.

Personality Dimensions

Fundamental attributes that capture the various aspects of a person's character and behavior, such as introversion/extraversion or openness to experience.

Neuroticism

A personality trait characterized by anxiety, fear, moodiness, worry, envy, frustration, jealousy, and loneliness.