Which One of the Following Actions Is the Best Example

question 235

Multiple Choice

Which one of the following actions is the best example of an agency problem?

• A) Paying management bonuses based on the number of store locations opened during the year.
• B) Paying management bonuses based on the current market value of the firm's stock.
• C) Accepting a project that enhances both management salaries and the market value of the firm's stock.
• D) Requiring stockholders approval of all management compensation decisions.
• E) Basing management bonuses on the attainment of specific financial goals.

---

Definitions:

Clonal Reproduction

A form of asexual reproduction where offspring arise from a single parent, inheriting the genes of that parent only, resulting in genetically identical individuals.

Plasma Cells

A type of white blood cell that produces antibodies to fight off infections.

Apoptosis

A form of programmed cell death that occurs in multicellular organisms, characterized by a series of biochemical events leading to changes in cell structure and death.

Interleukins

A diverse group of cytokines produced mainly by macrophages and lymphocytes.