Which of the Following Mechanisms Is Not Used by Shareholders

question 95

Multiple Choice

Which of the following mechanisms is not used by shareholders to get managers to act in shareholders' best interests?

• A) Threat of firing.
• B) Managerial compensation.
• C) Performance shares.
• D) Threat of takeover.
• E) Answers b and c above.

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Definitions:

Financial Measures

Quantitative figures used to assess a company's performance, financial health, and prospects for future success.

Controllable Margin

The portion of profit or cost that a manager has the power to directly control or influence through decisions and actions.

Labor Productivity

A measure of economic performance calculated by dividing the output of goods and services by the labor hours devoted to the production of that output.

Controllable Margin

The portion of profit or income generated by a business or department that can be directly controlled or influenced by management decisions.