Which of the Following Statements Is True About Takeover Constraint

question 40

Multiple Choice

Which of the following statements is true about takeover constraint?

• A) It encourages managers to put their own interests above those of stockholders.
• B) It usually occurs when the management has maximized the wealth of the stockholders.
• C) It often gives senior managers more independence when it comes to granting stock options.
• D) It has ceased to exist in companies since the late 1990s.
• E) It is the governance mechanism of last resort invoked only when the others have failed.

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Definitions:

Social Identity Theory

A psychological theory proposing that individuals’ sense of self is based on their membership in social groups, influencing their behaviors and attitudes.

Intergroup Conflicts

Conflicts that arise between different groups, often due to competition for resources, differing values, or power imbalances.

Social Categorization

The cognitive process by which people classify themselves and others into various social groups or categories, based on characteristics like race, gender, and social roles, to simplify social interactions.

Competition

A situation in which two or more parties strive for a goal that cannot be shared, often resulting in a win-lose scenario.