This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: stockholders and bondholders? a. Including restrictive covenants in the companys bond contract. b. Providing managers with a large number of stock options. c. The passage of laws that make it easier for companies to resist hostile takeovers. d. Statements b and c are correct. e. All of the statements above are correct. Agency Answer: b Diff: E i . Goal of firm Answer: d Diff: E ii . Agency Answer: d Diff: E Both statements a and b are correct; therefore, statement d is the correct choice. The threat of a takeover alleviates the agency problem between managers and stockholders, not between bondholders and stockholders. iii . Agency Answer: a Diff: E Statement a is correct; the other statements are false. Restrictive covenants resolve differences between bondholders and stockholders....
View Full Document
This note was uploaded on 08/04/2011 for the course COMM 101 taught by Professor Sy during the Spring '11 term at USC.
- Spring '11