If a Firm's Board of Directors Wants to Maximize Value

question 42

True/False

If a firm's board of directors wants to maximize value for its stockholders in general (as opposed to some specific stockholders),it should design an executive compensation system whose focus is on the firm's long-term value.

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Definitions:

United States

A federal republic in North America composed of 50 states, a federal district, five major territories, and various possessions.

Chaparral Biome

A biome characterized by dense, evergreen shrubs and small trees, Mediterranean climate with wet winters and dry summers, and frequent wildfires.

Grasses

A family of plants characterized by long, slender leaves and seed-bearing florets; commonly found in meadows and cultivated lawns.

Biogeographical Realms

Large spatial regions of the Earth's surface, each containing characteristic and distinct communities of plants and animals.