Which of the Following Statements Is False

question 3

Multiple Choice

Which of the following statements is false?

• A) Increasing the pay-for-performance sensitivity comes with the added benefit of reducing managers' risk.
• B) Stock and option grants give managers a direct incentive to increase the stock price to make their stock or options as valuable as possible.
• C) By tying compensation to performance, the shareholders effectively give the manager an ownership stake in the firm.
• D) During the 1990s, most companies adopted compensation policies that more directly gave managers an ownership stake by including grants of stock or stock options to executives.

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Definitions:

Output

The total amount of goods or services produced by a company or country.

TVC

Total Variable Cost, the sum of all variable costs (costs that vary with production volume) associated with producing a specific quantity of a good or service.

Output

The total amount of goods or services produced by a company, industry, or economic system.