The Chronic Problem with Stock Options Is That Firms Have

question 11

True/False

The chronic problem with stock options is that firms have traditionally used them to reward managers for even lackluster performance.

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Definitions:

Tort Liability

Legal responsibility arising from a civil wrong or injury to others that does not arise from a breach of contract or other agreement.

Disclosed Principal

A legal relationship in which an agent acts on behalf of a principal, with the third party being aware of the principal’s identity.

Unidentified Principal

A principal in an agency relationship whose identity remains unknown to the third party at the time of the agency transaction.

Commercial Transaction Law

Governs the rights, relations, and conduct of persons and businesses engaged in commerce, merchandising, trade, and sales.