A Combination of Well-Designed Management Compensation Contracts,the Market for Corporate

question 36

Multiple Choice

A combination of well-designed management compensation contracts,the market for corporate takeovers,and a well-informed labour market shoulD.

• A) Not be necessary as any one of these methods will control a manager's actions.
• B) Ensure that managers only act in their own self-interest.
• C) Mean that, on average, managers work in the best interests of owners.
• D) Remove any monitoring and bonding costs required under PAT.
• E) Guarantee that managers will always work in the best interests of owners.

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