Which of the Following Statements About Governance Mechanisms Is Misleading

question 36

Multiple Choice

Which of the following statements about governance mechanisms is misleading? 

• A) Governance mechanisms can be classified as voice-based and exit-based mechanisms. 
• B) As an external governance mechanism, private equity utilizes the stock market to discipline managers. 
• C) In general, boards are likely to use "carrots" before considering "sticks." 
• D) Product market competition complements the market for corporate control and the market for private equity.

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Definitions:

Intoxication

The condition of having physical or mental control impaired by the consumption of alcohol or drugs.

Substance

Naturally occurring or synthetically produced product that alters perceptions, thoughts, emotions, and behaviors when ingested, smoked, or injected.

Substance Abuse

The harmful or hazardous use of psychoactive substances, including alcohol and illicit drugs, leading to addiction or dependence.

Harmful Consequences

Negative outcomes or damages resulting from an action, decision, or event.