When Are the Interests of Stockholders and Senior Managers Likely

question 30

Multiple Choice

When are the interests of stockholders and senior managers likely to be most closely aligned?

• A) When the board of directors is dominated by insiders
• B) When managers receive most of their compensation in the form of a regular salary
• C) When managers receive most of their compensation in the form of stock options
• D) When stockholders are weak
• E) When corporate raiders are unable to mount a takeover bid

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Definitions:

Lease Payments

Lease payments are regular payments made by a lessee to a lessor for the use of an asset, such as real estate or a vehicle, over a certain period.

Duty To Pay

The legal obligation of a debtor to settle a debt or fulfill a contractual monetary obligation.

An Assignment

is the transfer of rights, property, or obligations from one party to another, typically involving contractual agreements or legal rights.

Abandonment

Behavior in which a tenant moves out of a leased premises before the end of the term and discontinues making rent payments.