Paying Payroll Service (PPS) Recently Declared Bankruptcy

question 75

Multiple Choice

Paying Payroll Service (PPS) recently declared bankruptcy. The price of PPS's stock has dropped from approximately $10 per share one year ago to $1 today. You can imagine that stockholders are not happy that the value of their stock has dropped so significantly. At the same time the financial position of the firm was deteriorating, PPS executives increased their salaries and perquisites substantially. Nothing they did violated any laws or was considered an unethical act. We would most likely describe this situation as _____. 

• A)an agency problem
• B)an accounting glitch
• C)an appropriate use of the tax laws
• D)an appropriate action, because executive compensation should always be increased substantially each year
• E)acceptable, because it is obvious that the executives were trying to maximize the value of the firm, which is what the shareholders want them to do

Understand the challenges in discussing and prioritizing issues.

Comprehend the impact of negotiation strategies on the relationship between parties.

Recognize the significance of the pre-negotiation phase.

Understand the role of flexibility and adaptability in the negotiation process.

---

Definitions:

Psychomotor Disturbance

A disruption or impairment in the ability to control movements or perform tasks requiring motor coordination.

Loss Of Appetite

A decreased desire to eat, which can be due to various factors including emotional distress, illness, or medication side effects.

Difficulty In Concentrating

A common cognitive issue where an individual finds it challenging to focus their attention on specific tasks or for an extended period of time.

Neuroticism

A personality trait characterized by anxiety, fear, moodiness, worry, envy, frustration, jealousy, and loneliness.