Methods to Minimize Agency Problem Include All Except ________________

question 27

Multiple Choice

Methods to minimize agency problem include all except ________________.

• A) Offer the managers an equity stake in the firm
• B) Award the CEO stock options
• C) Allow the CEO to purchase stock via an employee stock option plan
• D) Allow the CEO to purchase bonds via an employee bond option plan

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Definitions:

Offeree

The person to whom an offer is made, who has the power to accept the offer, thus forming a binding contract.

Reasonable Means

Methods or actions that are considered fair, rational, and appropriate under given circumstances.

General Contract Law

A legal framework governing the formation, execution, and enforcement of agreements between parties.

Invitation To Trade

An announcement published for the purpose of creating interest and attracting a response by many people.