Which of the Following Is a Tool That May Be

question 33

Multiple Choice

Which of the following is a tool that may be used to minimize agency problems?

• A)capital rationing
• B)contingent compensation
• C)audits
• D)All of the above can be used to minimize agency problems.

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Definitions:

Traded Stock

Shares of a company that are bought and sold in public markets, such as stock exchanges, representing ownership interests in the corporation.

Callable Bond

A type of bond that gives the issuer the right to repay the bond before its maturity date at a predetermined price.

Buy Back

The process by which a company repurchases its own shares from the marketplace, reducing the amount of outstanding stock.

Maturity

The time at which a financial instrument (such as a bond, loan, or investment) becomes due for payment or expires.