Which One of the Following Actions Is the Best Example

question 200

Multiple Choice

Which one of the following actions is the best example of an agency problem?

• A) Paying management bonuses based on the number of store locations opened during the year.
• B) Paying management bonuses based on the current market value of the firm's stock.
• C) Accepting a project that enhances both management salaries and the market value of the firm's stock.
• D) Requiring stockholders approval of all management compensation decisions.
• E) Basing management bonuses on the attainment of specific financial goals.

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An abstract idea or mental structure used to organize knowledge and guide thought or action.