Which of the Following Is NOT a Reason Why the "Market

question 55

Multiple Choice

Which of the following is NOT a reason why the "market for corporate control" is the most effective mechanism to give managers the incentive to act like shareholders?

• A)The government imposes significant lawsuits and penalties for managers not acting in the best interests of shareholders.
• B)The threat of acquisition keeps managers focused on achieving good performance and a high stock price.
• C)A low stock price makes a firm a good target for acquisition.
• D)It allows the best managers the chance to manage assets.

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