The _____ of using the market for corporate control make it important to build incentives into executive pay packages that can reduce _____ by better aligning the incentives of shareholders and managers
a. benefits; principal/agent problems
b. costs and uncertainties; principal/agent problems
c. benefits; influence costs
d. costs and uncertainties; influence costs
B
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If the interest rate is positive, the future value of an interest bearing investment is always larger than the present value
What will be an ideal response?
For a given aggregate supply curve, an increase in aggregate demand will: a. decrease the real interest rate
b. increase real GDP. c. decrease the price level. d. increase the real exchange rate. e. decrease real GDP.
Idiosyncratic risk:
A. can not be eliminated through diversification. B. is unique to a particular company or asset. C. is not generally absent from index funds. D. All of these are true.
If the government imposes a price ceiling,
a. producers must charge the ceiling price b. the price offered by producers must be no lower than that ceiling price c. the price offered by producers must be no higher than that ceiling price d. producers would be inclined to increase the quantity supplied e. the market supply curve shifts to the right