Which of the Following Actions Would Be Most Likely to Reduce

question 60

Multiple Choice

Which of the following actions would be most likely to reduce potential conflicts of interest between stockholders and managers?

• A) Pay managers large cash salaries and give them no stock options.
• B) Change the corporation's formal documents to make it easier for outside investors to acquire a controlling interest in the firm through a hostile takeover.
• C) Beef up the restrictive covenants in the firm's debt agreements.
• D) Eliminate a requirement that members of the board of directors must hold a high percentage of their personal wealth in the firm's stock.
• E) For a firm that compensates managers with stock options,reduce the time before options are vested,i.e. ,the time before options can be exercised and the shares that are received can be sold.

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Definitions:

Premature Death

Death that occurs before the average age of death in a certain population, often as a result of diseases, accidents, or other avoidable circumstances.

Healthier Eating Habits

Dietary practices that promote health and well-being, including balanced nutrient intake and mindful eating.

ADHD

A neurodevelopmental disorder characterized by patterns of inattention, hyperactivity, and impulsivity that are not appropriate for a person's age.

Hyperactivity

A condition characterized by excessive movement, impulsivity, and difficulty in maintaining attention, often associated with ADHD.