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.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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