41.The Corporate Library (TCL) uses a "grade" scale of A to F to indicate governance risk. Each rating is based on an assessment of some components including:

Select one:

a. Takeover defenses

b. Board-level accounting concerns

c. All of the above

d. CEO compensation practices

42.Potential benefits of family ownership include:

Select one:

a. Effectively monitored executives and minimized free-rider problems due to close links between family wealth and firm welfare

b. All of the above

c. Long investment horizons that suggest a willingness to invest in long-term projects relative to smaller executive horizons

d. Greater incentive to maximize competitive advantages and firm performance

43.At lower levels of managerial ownership, equity ownership and firm value are:

Select one:

a. No Correlation

b. Positively correlated

c. Inversely correlated

d. Negatively correlated

44.Which of the following is not right about founding-family ownership?

Select one:

a. There are no potential benefits of family ownership

b. Founding families may have strong incentives to maximize firm value, because the family's value is so closely linked to firm welfare

c. With substantial ownership of cash flows, founding families have the incentives and power to take actions that benefit themselves at the expense of firm performance

45.Which of the following is not a reason for potential executive compensation distortion?

Select one:

a. Difficulty to identify appropriate market wage attract qualified candidate

b. The board is obliged to determine the right amount of compensation, which is the maximum amount to attract and retain qualified CEO candidate

c. Some board members might not be independent

d. Board members might have less power relative to the CEO

Answer rating: 100% (QA)

41 Option C is correct All of above All option are ... View the full answer