Incentives Are

question 307

Multiple Choice

Incentives are

• A) potential rewards available if a particular activity is undertaken.
• B) ineffective as a device to get people to behave in a certain fashion.
• C) inappropriate ways to obtain a certain kind of behavior.
• D) useless when people behave rationally.

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Definitions:

Dividend Policy

A company's approach to distributing profits back to its shareholders either in the form of cash payments or shares of stock.

Firm Value

The total value of a company, determined by its assets, earnings, cash flow, and market perception.

Market Imperfections

Occur when conditions for perfect market competition are not met, leading to inefficiencies such as monopolies or information asymmetries.