As Mergers, Acquisitions, and Restructuring Have Increased in Importance, Agency

question 72

Multiple Choice

As mergers, acquisitions, and restructuring have increased in importance, agency theory has become more important in assessing whether

• A) a stock repurchase should be undertaken.
• B) shareholder goals are truly being achieved by managers in the long run.
• C) managers are actually agents or only employees of the firm.
• D) managers are owners of the company and act the same with the same interests.

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Definitions:

Uncertainty

A condition of limited knowledge where it is impossible to exactly describe an existing state, future outcome, or more than one possible outcome.

Social Facilitation

An improvement in performance produced by the mere presence of others, often because of increased arousal and motivation to perform well.

Mimicking Emotions

The act of copying or displaying emotions that are not genuinely felt, often to fit into a social context or as a response to social cues.

Group Pressure

The influence exerted by a group that encourages members to change their attitudes, values, or behaviors to conform to group norms.