Which of the Following Actions Would Be Likely to Reduce

question 55

Multiple Choice

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

• A) Congress passes a law that severely restricts hostile takeovers.
• B) A firm's compensation system is changed so that managers receive larger cash salaries but fewer long-term options to buy stock.
• C) The company changes the way executive stock options are handled, with all options vesting after 2 years rather than having 20% of the options awarded vest e2 years over a 10-year period.
• D) The company's outside auditing firm is given a lucrative year-by-year consulting contract with the company.
• E) The composition of the board of directors is changed from all inside directors to all outside directors, and the directors are compensated with stock rather than cash.

---

Definitions:

Twisted-pair

A type of cabling that consists of pairs of wires twisted together to reduce electromagnetic interference.

Cable Medium

A physical transmission medium used in networking to carry data through wires, including coaxial and fiber-optic cables.

Twisted-pair

Twisted-pair cable is a type of wiring in which two conductors of a single circuit are twisted together for the purposes of improving electromagnetic compatibility.

Cable Medium

A type of physical medium used for transmitting data through networks, consisting of copper or fiber-optic cables.