Quiz Ch 12 – T/F Entrenching Investment Illustration
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
True or false: Expanding the managerial operation serves as an example of an entrenching investment.
True or false: Expanding the managerial operation serves as an example of an entrenching investment.
True or false: Boards of directors in countries outside the United States have historically exhibited a more amicable stance towards their respective managers.
True or false: Stock-based managerial compensation aligns managers’ interests with macroeconomic risks.
True or false: Shareholders often turn to independent auditors to assess their managers’ performance.
True or false: Small shareholders typically initiate proxy contests when a company is underperforming.
True or false: Typically, top management employs spreadsheet programs to assess all capital budgeting projects before reaching decisions.
True or false: Stock option grants are deemed more suitable as compensation for lower-level managers compared to their appropriateness for higher-level managers.
True or false: Tax advantages in the United States encourage the use of stock option grants, rather than salary increments, as a means to reward good performance by CEOs in large firms.
Which group or entities hold the primary responsibility for monitoring a firm?