Which of the Following Are Mechanisms That Have Evolved to Mitigate

question 38

Multiple Choice

Which of the following are mechanisms that have evolved to mitigate potential agency problems?
I.Compensation in the form of the firm's stock options
II.Hiring bickering family members as corporate spies
III.Underperforming management teams being forced out by boards of directors
IV.Security analysts monitoring the firm closely
V.Takeover threats

• A)II and V
• B)I, III, and IV
• C)I, III, IV, and V
• D)III, IV, and V
• E)I,III,and V

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Definitions:

Profitability Ratios

Financial metrics used to evaluate a company's ability to generate profit relative to its revenue, assets, equity, or other financial metrics.

Operating Income

The profit realized from a business's operations after subtracting operating expenses from gross income.