chapter 1 finance

Compensating managers with shares of stock that must be held for a minimum of three years

Which one of the following is most apt to align management's priorities with shareholders' interests?

Basing management bonuses on the length of employment

Which one of the following situations is most apt to create an agency conflict?

automatically increasing management salaries on an annual basis.

Probably the least effective means of aligning management goals with shareholder interests is:

current market value per share

The goal of financial management is to increase the:

agency

The potential conflict of interest between a firm's owners and its managers is referred to as which type of conflict?

the market value of the firm

The primary goal of financial management is most associated with increasing the:

the market value of existing stock

The primary goal of financial management is to maximize:

an agency conflict

The shareholders of Qiang's Markets would benefit if the firm were to be acquired by Better Foods. However, Weil's board of directors rejects the acquisition offer. This is an example of:

the control of a firm is separated from the firm's ownership.

An agency issue is most apt to develop when: