________ Is a Mechanism for Mitigating Potential Agency Problems

question 64

Multiple Choice

________ is a mechanism for mitigating potential agency problems.

• A) Tying income of managers to success of the firm
• B) Directors defending top management
• C) Antitakeover strategies
• D) All of the options.

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Definitions:

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer, which is not related to its market value.

Moody's

A credit rating agency that evaluates the creditworthiness of borrowers, ranging from governments to private enterprises, and assigns ratings that reflect the risk of default.

Junk Bonds

High-risk, high-yield bonds rated below investment grade by credit rating agencies, often issued by companies with poorer credit ratings.

High-yield

Bonds that offer higher interest rates because they have lower credit ratings, reflecting a higher risk of default.