If the Market for Corporate Control Were Efficient as a Governance

question 9

Multiple Choice

If the market for corporate control were efficient as a governance device, then only __________ would be targets for takeovers.

• A) firms with unethical top executives
• B) firms earning above-average returns
• C) poorly performing firms
• D) overvalued firms

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Definitions:

Government Surplus

The situation where government revenues exceed its expenditures during a specific period.

Total Amount

The complete sum or quantity of something.

Price Floor

A price floor is a government-imposed minimum price set above the equilibrium price for a product or service, aimed to ensure producers receive a fair return.

Surplus

The situation in which the quantity of a good produced exceeds the quantity demanded, often leading to a decrease in prices.