QUESTION 1 1 points A common suggestion to align the goals of managers with thos

Question

QUESTION 1 1 points A common suggestion to align the goals of managers with those of the stockholders is to pursue O stock options. O liberal vacation leave O lower salaries. None of the above. QUESTION 2 1 points A purchase of a controlling quantity of shares of a firm by an individual, a group of investors, or another organization is known as a O leveraged buyout O takeover O stock option. O None of the above. QUESTION 3 1 points A situation in which a firm's managers fail to act in the best interest of the shareholders is known as the stakeholder dilemma. True OFalse QUESTION 4 1 points A situation in which a firm's managers fail to act in the best interest of the shareholders is known as O management ineffectiveness the agency problem. O managerial goal incongruity. ONone of the above. QUESTION 5 1 points Adverse selection exists when the parties in an arrangement do not share equally in the risiks and benefits. True Click Save and Submit to save and submit. Click Save AL Answers to save oll answers Save All Answers

Explanation / Answer

1 - Answer 4 - None of the above, the common goal of the managers and the shareholders of the company is that of value creation for the company and none of the above is near to that.

2 - Answer 2 - Takeover, it is an act of purchasing shares in such quantity so that the buyer would have controlling rights of the company, the stock options are given to the employee and is of small amount and the leveraged buyout is to sell small number of share so that money could be borrowed to be paid back.

3 - Answer 2 - False - The stakeholder's dilemma means how much of the stakeholders are actively involved in the companies day to day business ethically.Plus the manager should not only act in the interest of shareholders but all the stakeholders of the company.

4 - Answer 3- Managerial goal incongruity - it means that the management and the manager do not share the same goal, there is certain dissonance in between two, this does not work well in the interest of the shareholders. on another side, manager ineffectiveness is the capability of the manager.

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