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Which of These Statements About Incentives Is Matched to the Correct

Question 6

Multiple Choice

Which of these statements about incentives is matched to the correct type of incentive?


A) investors and analysts view an investment with volatile earnings as risky- DEBT CONTRACT
B) top management compensation often includes a bonus plan linked to measures of success- EMPLOYMENT CONTRACTS
C) a CEO is removed for poor performance,and the following year the new CEO uses big bath accounting- SHAREHOLDER CONTRACTS
D) tax authorities use accounting data to determine the tax base of an entity- SHAREHOLDER CONTRACTS

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