Which of the Following Are Mechanisms That Help Minimize Agency

question 25

Multiple Choice

Which of the following are mechanisms that help minimize agency problems?

• A)Monitoring by boards of directors
• B)Monitoring by boards of directors and compensation tied to earnings and stock price
• C)Monitoring by boards of directors, compensation tied to earnings and stock price, and transparent financial reporting
• D)Monitoring by boards of directors, compensation tied to earnings and stock price, transparent financial reporting, and the threat of takeover

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Definitions:

Searching for Analogies

The cognitive process of identifying relationships between seemingly unrelated concepts or objects to aid in problem solving or understanding.

Problem-Solving Heuristic

A general strategy or approach to finding a solution for problems, typically involving shortcuts or rules of thumb.

Printer

A device that transfers text and graphics from a computer onto paper.

Working Backward

A problem-solving strategy that starts from the desired solution and works in reverse to determine the steps needed to achieve that solution.