Giving Managers an Ownership Stake in a Company Is an Example

question 319

Multiple Choice

Giving managers an ownership stake in a company is an example of

• A) a command system.
• B) an incentive system.
• C) a system that encourages managers to become agents that monitor their principals.
• D) economies of scope.

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Definitions:

Financial Statements

Comprehensive reports that present the financial performance, position, and cash flows of an entity over a specific period.

Outstanding Shares

The total number of a company's shares that are currently owned by shareholders, including shares held by institutional investors and restricted shares held by company officers and insiders.

Cash Dividends

Money paid out to shareholders by a corporation, often as a portion of the company's profits.

Journal Entries

Records of financial transactions in the double-entry bookkeeping system, showing debits and credits made in accounts to maintain the ledger.