Which one might NOT be a potential way to manage managers within a corporation to mitigate...
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Which one might NOT be a potential way to manage managers within a corporation to mitigate the agency problem between shareholder and manager? |
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Use stock options to tie the management's compensation with the firm's value |
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Set up anti-takeover mechanisms |
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Shareholders can oust management via proxy fights and takeover threat |
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Shareholders could make pressure on the manager to issue more dividend and debt |
Homework Answers
The following may not be a potential way to manage managers:-
d) Shareholders could make pressure on the manager to issue more dividend and debt
Shareholders cannot and should not pressurize managers to issue dividends, as the company is managed by the managers and only they know the intricacies of the business and so it might be in their opinion that dividends should not be issued as of now.
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