Ask Question
BusinessBusiness
12 June, 04:10

By tying the salaries of top corporate managers to the price of the corporation's stock, corporations hope to avoid Select one: a. the principal-agent problem. b. corporate governance. c. conflict between the CFO and the CEO d. paying high salaries to their managers.

+5
Answers (1)
  1. 12 June, 05:22
    0
    the principal-agent problem.

    Explanation:

    The principal agent problem occurs when an agent who is entrusted with an asset is having conflicting interest with the principal (asset owner).

    For example management of a company are the agents of the stockholders of the company.

    The main goal of the stockholder is to make profit. So if the salaries of the top management is tied to price of the company's stock, the manager's will work to ensure stocks remain profitable.

    This aligns the goals of the management and the shareholders thereby avoiding the principal agent problem.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “By tying the salaries of top corporate managers to the price of the corporation's stock, corporations hope to avoid Select one: a. the ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
3. What is the smart thing Pedro should do after he graduates? a. avoid paying back his student loans b. buy a car as soon as possible c. move far away d. make a budget
Answers (2)
Granfield Company is considering eliminating its backpack division, which reported an operating loss for the recent year of $42,000. The division sales for the year were $960,000 and the variable costs were $475,000.
Answers (1)
Tickets for the historical review of ballroom dancing at the Portsmouth Music Hall cost $42 for the main-floor seats and $25 for the balcony seats.
Answers (1)
You have $100,000 invested in a 2-stock portfolio. $30,000 is invested in stock with a beta of 1.60 and the remainder is invested in a stock with a beta of. 60. What is the portfolio's beta
Answers (1)
The variety of Riverside Ranger logo T-shirts includes 12 different designs. Setup between designs takes one hour (and $18,000), and after setting up, you can produce 1,000 units of a particular design per hour (at a cost of $8,000).
Answers (1)
New Questions in Business
The United States trade deficit first became a problem in the 1970s because? a. The prices of imports from Japan increased dramatically. b. The prices of imports from China increased dramatically. c. The price of foreign oil was raised by APEC. d.
Answers (1)
This document is published by the Office of Inspector General (OIG) every year. It details the OIG's focus for Medicare fraud and abuse for that year.
Answers (1)
Equity theory is the principle that when jobs are distinctly different but entail similar levels of ability, responsibility, skills, and working conditions, they are of equal value and should have the same pay scale. True False
Answers (1)
Which of the following situations will likely result in the highest price for a good? -high demand and high supply -low demand and high supply -low supply and low demand -low supply and high demand
Answers (1)
Which statement is not true? 26% of fortune 500 CEOs are women More than 50% of all professional level jobs are healed by women 8.1% of the top earners or women 4.6% of fortune 500 CEOs are women
Answers (1)
Home » Business » By tying the salaries of top corporate managers to the price of the corporation's stock, corporations hope to avoid Select one: a. the principal-agent problem. b. corporate governance. c. conflict between the CFO and the CEO d.
Sign Up Forgot Password?