Which of These Results from the Separation of Ownership and Management

question 5

Multiple Choice

Which of these results from the separation of ownership and management in large publicly traded corporations?

• A)Corporate managers have stronger incentives to rather quickly transfer control of the firm to less informed management teams.
• B)Corporate managers have weaker incentives to transfer control of the firm to less informed management teams.
• C)Corporate managers have stronger incentives to rather quickly transfer control of the firm to more informed management teams.
• D)Corporate managers have weaker incentives to transfer control of the firm to more informed management teams.

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Definitions:

Market Penetration

An indicator of the total sales or use of a product or service relative to the maximum potential market for that product or service.

Market Development

Strategies or activities aimed at finding new markets or expanding existing ones for a product or service.

Diversification

A strategy for managing risk that diversifies a portfolio by incorporating a broad range of investments to reduce the effect of any single asset's performance.

Market Penetration

A measure of the extent to which a product or service is recognized and bought by customers within a particular market.