One Method That Businesses Use to Overcome the Principal-Agent Problem

question 58

Multiple Choice

One method that businesses use to overcome the principal-agent problem is to:

• A) remove the board of directors' oversight of management.
• B) reward management regardless of performance.
• C) offer management stock options.
• D) not give employees a stake in the business.

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Definitions:

Pancreas

A glandular organ in the digestive system that produces insulin, digestive enzymes, and other hormones.

Thoroughfare Channel

Channel for blood through a capillary bed from an arteriole to a venule.

Capillary Bed

A capillary bed is a network of capillaries, which are small blood vessels, where exchange of water, oxygen, carbon dioxide, and many other nutrient and waste chemical substances occur between blood and surrounding tissues.

Sinusoid

Terminal blood vessel having a larger diameter than an ordinary capillary.