Which One of the Following Is Least Apt to Encourage

question 55

Multiple Choice

Which one of the following is least apt to encourage managers to act in the best interest of shareholders?

• A)Shareholder election of the board of directors,who in turn select managers
• B)Threat of a takeover by another firm
• C)Linking manager compensation to share value
• D)Compensating managers with fixed salaries
• E)Granting stock options to key managers

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Definitions:

Cumulative Voting

A method of electing boards of directors in which stockholders can cast all of their votes for a single seat. Enables minority interests to get at least some representation on the board.

Minority Stockholders

Minority stockholders are investors who own a smaller portion of a company's shares and typically do not have control or significant influence over the company's decisions.

American Political Culture

A set of shared values, beliefs, and behaviors that define the relationship between citizens and government in the United States.

Individualism

The principle of being independent and self-reliant, favoring freedom of action for individuals over collective or state control.