Which of the Following Actions Are Likely to Reduce the Agency

question 25

Multiple Choice

Which of the following actions are likely to reduce the agency problem between stockholders and managers?

• A) Congress passes a law that severely restricts hostile takeovers.
• B) A manager receives a lower salary but receives additional shares of the company's stock.
• C) The board of directors has become more vigilant in its oversight of the company's management.
• D) Statements b and c are correct.
• E) All of the statements above are correct.

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Definitions:

Moral Principles

Fundamental beliefs regarding what is right, fair, and just, which guide individuals’ behavior and decision-making processes.

High-Performance Work Practices

A set of management practices that aim to enhance organizational performance by improving employee involvement, commitment, and competencies.

Competitive Advantage

A condition or circumstance that puts a company in a favorable or superior business position compared to its competitors.

Human Capital

Human capital represents the knowledge, skills, competencies, and attributes embodied in individuals that facilitate the creation of personal, social, and economic well-being.