Multiple Choice
Managers and shareholders have differing incentives regarding the firm.The statement regarding incentives that is true is:
A) Because shareholders' investment portfolios can be widely diversified they are less likely to want to undertake risky projects than managers
B) A manager can fully diversify his/her risk by investing in other firms
C) Managers may hold off paying dividends to owners in order to 'empire build'
D) We would expect the horizon problem to lessen as a manager's age increases
Correct Answer:
Verified
Correct Answer:
Verified
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