Which of the Following Is NOT a Reason Why the "Market

question 55

Multiple Choice

Which of the following is NOT a reason why the "market for corporate control" is the most effective mechanism to give managers the incentive to act like shareholders?

• A)The government imposes significant lawsuits and penalties for managers not acting in the best interests of shareholders.
• B)The threat of acquisition keeps managers focused on achieving good performance and a high stock price.
• C)A low stock price makes a firm a good target for acquisition.
• D)It allows the best managers the chance to manage assets.

---

Definitions:

Debt

Money that is owed or due to another individual, entity, or institution.

Enforceable

Capable of being imposed by law or through legal action, usually in reference to contracts, agreements, or regulations.

Sale of Goods

A transaction between a buyer and seller where the ownership of tangible personal property is transferred for a price.

Quantity Term

A provision in a contract that specifies the amount of goods or services to be provided or delivered.