Which of the Following Actions Would Be Likely to Reduce

question 23

Multiple Choice

Which of the following actions would be likely to reduce potential conflicts of interest between stockholders and managers?

• A) Congress passes a law that severely restricts hostile takeovers.
• B) A firm's compensation system is changed so that managers receive larger cash salaries but fewer long-term options to buy stock.
• C) The company changes the way executive stock options are handled,with all options vesting after 2 years rather than having 20% of the options awarded vest every 2 years over a 10-year period.
• D) The company's outside auditing firm is given a lucrative year-by-year consulting contract with the company.
• E) The composition of the board of directors is changed from all inside directors to all outside directors,and the directors are compensated with stock rather than cash.

Recognize the concept of ego resiliency and ego control in the context of psychological theory.

Understand the principles of offer and acceptance in contract formation.

Identify the conditions under which an advertisement constitutes an offer or an invitation to treat.

Recognize the role of consideration and intention in establishing a legal relationship.

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Definitions:

Moment-To-Moment

Describes events or changes that occur in real-time, often used in the context of recording or analyzing experiences as they happen.

Conscious Experience

The subjective state of being aware of one’s thoughts, feelings, perceptions, and surroundings.

Free Will

The belief in an individual's capacity to choose or act independently, without being controlled by fate or external forces.

Political

Pertaining to the activities, actions, and policies aimed at governing a community or nation, often through the exercise of authority and power.