The Board of Directors of Beeline, Inc

question 190

Multiple Choice

The Board of Directors of Beeline, Inc. has decided to base the salary of its financial manager entirely upon the market share of the firm. Accordingly,

• A) The firm may incur some agency costs since the manager will be focused on the market share of the firm rather than acting to maximize earnings.
• B) The financial manager will always act in the best interest of the shareholders since all agency costs have been eliminated through salary incentives.
• C) This arrangement may be unnecessary, since the goal of the firm is to maximize earnings for shareholders, and that is most likely accomplished through larger market share.
• D) The manager may not act to maximize the current value of the firm's stock, resulting in agency costs for the firm's stockholders.
• E) The firm will incur some agency costs if the manager acts to maximize market share.

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Definitions:

Transference

The redirection of feelings and desires, especially those unconsciously retained from childhood, toward a new object, often the therapist in psychotherapy.

Client-Therapist Relationship

The professional and therapeutic bond between a therapist and their client, which is critical for effective therapy, emphasizing trust, rapport, and mutual respect.

Gestalt Therapy

A form of psychotherapy focusing on self-awareness and the present moment, emphasizing experiential learning rather than interpretation.

Person-Centered Therapy

A psychological approach that emphasizes the importance of the individual's subjective experience and the therapeutic relationship, based on principles of empathy, congruence, and unconditional positive regard.