Methods to Minimize Agency Problem Include All EXCEPT

question 16

Multiple Choice

Methods to minimize agency problem include all EXCEPT

• A) offer the managers an equity stake in the firm.
• B) award the CEO stock options.
• C) allow the CEO to purchase stock via an employee stock option plan.
• D) allow the CEO to purchase bonds via an employee bond option plan.

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Definitions:

Financial Condition

A description of an entity's financial status, including assets, liabilities, and equity at a specific point in time.

Service Charge

Fees charged for services provided, typically by banks or other financial institutions, which may include account maintenance or transaction fees.

Credit Card

A credit card is a payment card issued by financial institutions that allows cardholders to borrow funds within an agreed limit for purchases or cash advances.

Journal Entry

A journal entry is a record in accounting that logs a transaction in the financial statements of a business.