Which of the Following Statements Is True

question 38

Multiple Choice

Which of the following statements is true?

• A)Shareholders as a group have little or no ability to force managers to pursue maximization of the firm's value.
• B)The effectiveness of a board of directors in monitoring managers is enhanced by appointing members from the firm who are well-informed about the management problems facing the firm.
• C)Reducing the amount of debt financing can reduce divergence between the shareholders' interests and the manager's interests.
• D)Equity ownership by managers is thought to be one of the most effective corporate control mechanisms.
• E)All of the above are true.

---

Definitions:

World Wide Web

An information system where documents and other web resources are identified by Uniform Resource Locators (URLs), which are interlinked by hypertext and accessible via the Internet.

Intranet

A private network accessible only by an organization's staff, often used to share information, operational systems, or computing services within the organization.

Extranet

A private network that uses Internet technology and public telecommunication systems to securely share part of a business's information or operations with suppliers, vendors, partners, customers, or other businesses.

Enterprise Network

An organization’s network, which is composed of interconnected multiple LANs and WANs.