Question: please answer both 4. Incentive compensation plans are designed to: A. motivate managers to do what is in the best interest of shareholders. B. overcome
4. Incentive compensation plans are designed to: A. motivate managers to do what is in the best interest of shareholders. B. overcome agency costs. C. tie management compensation to the stock price. D. typically give managers the right to purchase stock at a fixed price, usually the current market price at the time the right is granted. E, all of the above. 5. Which of the following statements explains why maximizing profits fall short of maximizing shareholders wealth? A profits reflect the past instead of the future, B. profits ignore the time value of money C profits rely on nccounting principles and do not measure the cash flow with which a company pay its bills. D. All of the above, E none of the above
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