Which of the Following Statements Is True About Takeover Constraint

question 43

Multiple Choice

Which of the following statements is true about takeover constraint?

• A)It encourages managers to put their own interests above those of stockholders.
• B)It usually occurs when the management has maximized the wealth of the stockholders.
• C)It often gives senior managers more independence when it comes to granting stock options.
• D)It has ceased to exist in companies since the late 1990s.
• E)It is the governance mechanism of last resort invoked only when the others have failed.

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Definitions:

Direct Labor

The wages and related expenses for workers who are directly involved in the production of goods or services.

Raw Material

Basic materials used in the manufacturing process to produce finished goods.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including both materials and labor costs.

Raw Material

Basic materials or substances used in the manufacturing or production process to create goods and products.