Multiple Choice The effectiveness of a board of directors in monitoring managers will be enhanced by appointing members from the firm who are well-informed about the management problems facing the firm. Equity ownership by managers is thought to be one of the most effective corporate control mechanisms. Reducing the amount of debt financing can reduce the divergence between the shareholders' interests and the owner's interests. Shareholders have little or no ability to force managers to pursue maximization of the firm's value.

Multiple Choice The effectiveness of a board of directors in monitoring managers will be enhanced by appointing members from the firm who are well-informed about the management problems facing the firm. Equity ownership by managers is thought to be one of the most effective corporate control mechanisms. Reducing the amount of debt financing can reduce the divergence between the shareholders' interests and the owner's interests. Shareholders have little or no ability to force managers to pursue maximization of the firm's value.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter1: Introduction And Goals Of The Firm

Section: Chapter Questions

Problem 2E

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