Stock options perfectly align management incentives with incentives of owners
Indicate whether the statement is true or false
F The alignment of incentives is not perfect. Owners usually have large investments committed to the firm, and are concerned about protecting them. Management stock options represent no such commitment, and managers gain only from an increase in stock value that will enable them to sell their options and gain the amount of the stock increase. The management incentive from stock options therefore focuses on increasing stock value, not preserving stock value.
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Teenage workforce participation as a percentage of the total workforce has fallen in the United States in recent years.
Answer the following statement true (T) or false (F)
Producer surplus is the difference between the
A) price and the willingness to pay for the good. B) price and the marginal cost of producing the good summed over the quantity sold. C) willingness to pay for the good and the marginal cost of producing the good summed over the quantity sold. D) marginal benefit of consuming the good and the marginal cost of producing the good summed over the quantity sold.
The interest rate that banks charge other banks for overnight loans is the
A) discount rate. B) Treasury bill rate. C) prime rate. D) federal funds rate.
Compared to the situation prior to 1980, the top marginal personal income tax rate imposed on the rich is now substantially
a. lower and so is the share of the revenue collected from them. b. higher and so is the share of the revenue collected from them. c. lower, but the share of the revenue collected from them is now higher. d. higher, but the share of the revenue collected from them is now lower.