Question

Which of the following actions would be most likely to reduce potential conflicts of interest between stockholders and managers?
a. Pay managers large cash salaries and give them no stock options.
b. Beef up the restrictive covenants in the firm's debt agreements.
c. Change the corporation's formal documents to make it easier for outside investors to acquire a controlling interest in the firm through a hostile takeover.
d. Eliminate a requirement that members of the board of directors must hold a high percentage of their personal w

Answer 1

Answer:

C. Change the corporation's formal documents to make it easier for outside investors to acquire a controlling interest in the firm through a hostile takeover.

Answer 2

Answer:

c. Change the corporation's formal documents to make it easier for outside investors to acquire a controlling interest in the firm through a hostile takeover.

Explanation: