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Stock Options Do Not Eliminate the Principal- Agent Problem Entirely

Question 51

Multiple Choice

Stock options do not eliminate the principal- agent problem entirely for each of the following reasons except which one?


A) A company's stock price rarely changes.
B) A company's profit depends on the actions of all employees.
C) A company's executive does not have unlimited control over all employees and their actions.
D) A company's stock prices fluctuate for reasons not directly related to a company's profit.

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