Institutional investors can ensure that a corporation pursues goals that are in
ID: 1175586 • Letter: I
Question
Institutional investors can ensure that a corporation pursues goals that are in their best interest by _____.
ensuring that the management is working toward maximizing current earnings
implementing policies that encourage management to make decisions that maximize managers' wealth
compensating managers of the corporation on the basis of the firm's performance in the short run
binding the management with stockholder-sponsored proposals
monitoring its financial performance to ensure that managers pursue the goal of wealth maximization
a.ensuring that the management is working toward maximizing current earnings
b.implementing policies that encourage management to make decisions that maximize managers' wealth
c.compensating managers of the corporation on the basis of the firm's performance in the short run
d.binding the management with stockholder-sponsored proposals
e.monitoring its financial performance to ensure that managers pursue the goal of wealth maximization
Explanation / Answer
Option e is correct- monitoring its financial performance to ensure that managers pursue the goal of wealth maximization