Which of These Are NOT Basic Approaches to Minimizing the Agency

question 56

Multiple Choice

Which of these are NOT basic approaches to minimizing the agency problem?

• A)Ignore the conflict of interest.
• B)Monitor managers' actions.
• C)Align managers' personal interest with those of the owners by making the managers owners.
• D)All of these are basic approaches to minimizing the agency problem.

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Definitions:

Minimum Number

The lowest quantity or amount that is allowed, required, or desired.

Coupon Rate

The percentage rate of interest a bond yields annually, based on its nominal value.

Yield To Maturity

The total return anticipated on a bond if it is held until the due date, considering all interest payments and the capital gain or loss.

Semiannually

Occurring twice a year; a term often used to describe the frequency of interest payment, dividends, or other financial events.