Which of the Following Statements Is False

question 14

Multiple Choice

Which of the following statements is false?

• A) The relationship between managerial ownership and firm value is unlikely to be the same for every firm, or even for different executives of the same firm.
• B) Even with the risk benefits of separating ownership and control, there are still examples of corporations in which the top managers have substantial ownership interests.
• C) Academic studies do not support the notion that greater managerial ownership is associated with fewer value-reducing actions by managers.
• D) While increasing managerial ownership may reduce perquisite consumption, it also makes managers harder to fire-thus reducing the incentive effect of the threat of dismissal.

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Definitions:

Possession Utility

The value added by the process of transferring the ownership of a product or service from one party to another, enhancing its appeal to potential buyers.

Ownership Utility

The added value or benefit provided to a product or service by ensuring that the consumer has the legal right or ownership to use or dispose of it as they see fit.

Product Availability

The extent to which products are in stock and can be purchased by consumers at any given time.

Exchange Process

The exchange process refers to the series of actions in which two or more parties give something of value to each other, usually in the context of business or trade.