Which of the Following Is a Reason Why Managers Act

question 30

Multiple Choice

Which of the following is a reason why managers act to maximize shareholder wealth in Anglo-American markets?

• A) the use of stock options to align the goals of shareholders and managers
• B) the market for corporate control that allows for outside takeover of the firm
• C) performance-based compensation for executive management
• D) all of the above

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Definitions:

Natural Resource

Materials or substances such as minerals, forests, water, and fertile land that occur in nature and can be used for economic gain.

Straight-Line Method

A depreciation technique that allocates an equal amount of an asset's cost to each year of its useful life.

Commercial Substance

A term used in accounting to indicate that a transaction has caused a change in the economic circumstances of a business.

Future Cash Flows

Estimated amounts of money expected to be received or paid out in the future due to current or planned operations or investments.