Which of the Following Statements Is FALSE

question 29

Multiple Choice

Which of the following statements is FALSE?

• A)The shareholders as a group elect a board of directors to monitor managers.The directors themselves,however,have the same conflict of interest-monitoring is costly and in many cases directors do not get significantly greater benefits than other shareholders from monitoring the managers closely.
• B)In principle,the board of directors hires the executive team,sets its compensation,approves major investments and acquisitions,and dismisses executives if necessary.
• C)In the United States,the board of directors has a clear fiduciary duty to protect the interests of both the owners of the firm (the shareholders)and the interests of other stakeholders in the firm (such as the employees).
• D)When the ownership of a corporation is widely held,no one shareholder has an incentive to bear the cost of monitoring,because she bears the full cost of monitoring but the benefit is divided among all shareholders.

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Definitions:

Short Exposure

A brief period of time during which consumers are exposed to a message, advertisement, or product.

Advertising

The act of promoting products, services, or brands through various forms of media in order to attract public attention or interest.

Nonpaid Form

A method of promotion that does not involve direct payment, such as word of mouth, organic social media, or public relations efforts.

Contest

A competition between individuals or groups aiming to achieve victory or meet a specific objective, often used in marketing to engage customers.