Which of the following statements is CORRECT? -One of the ways in which firms ca
ID: 2633772 • Letter: W
Question
Which of the following statements is CORRECT?
-One of the ways in which firms can mitigate or reduce potential conflicts between bondholders and stockholders is by increasing the amount of debt in the firm's capital structure.
-The threat of takeover generally increases potential conflicts between stockholders and managers.
-Managerial compensation plans cannot be used to reduce potential conflicts between stockholders and managers.
-The threat of takeovers tends to reduce potential conflicts between stockholders and managers.
-The creation of the Securities and Exchange Commission (SEC) has eliminated conflicts between managers and stockholders.
-One of the ways in which firms can mitigate or reduce potential conflicts between bondholders and stockholders is by increasing the amount of debt in the firm's capital structure.
-The threat of takeover generally increases potential conflicts between stockholders and managers.
-Managerial compensation plans cannot be used to reduce potential conflicts between stockholders and managers.
-The threat of takeovers tends to reduce potential conflicts between stockholders and managers.
-The creation of the Securities and Exchange Commission (SEC) has eliminated conflicts between managers and stockholders.
Explanation / Answer
Managerial compensation plans cannot be used to reduce potential conflicts between stockholders and managers.
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