​An Incentive Conflict Is When

question 67

Multiple Choice

​An incentive conflict is when

• A)​The agent and the principal have identical incentives
• B)The agent has different incentives than does the principal
• C)The agent and the principal neither have any incentives to work hard
• D)​None of the above

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Definitions:

Total Fairness Test

A legal standard used to evaluate the overall fairness and equity of a corporate action or decision, especially in mergers and acquisitions.

Straight Voting

A form of voting for directors that ordinarily permits a shareholder to cast a number of votes equal to the number of shares he or she owns for as many nominees as there are directors to be elected. See also cumulative voting.

GATT

The General Agreement on Tariffs and Trade, a legal agreement between many countries aimed at promoting international trade by reducing or eliminating trade barriers such as tariffs or quotas.

Lack Of Care

A failure to act with the attention or caution that a reasonable or prudent person would under similar circumstances, often leading to negligence claims.