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:

Dollar Votes

A concept in economics where consumers show preference for goods and services by how they spend their money, influencing production and market trends.

Goods And Services

Physical items that satisfy human wants and provide benefits, and intangible activities or benefits that are exchanged between parties.

Willingness And Ability

The readiness and capacity of an individual or group to engage in a particular activity or transaction.

Consumers

Consumers are individuals or entities that purchase goods and services for personal use and not for manufacture or resale.