Managerial entrenchment means that managers and run the firm for their own best interests.

Question

Quizplus · Accepted Answer

Managerial entrenchment is when managers are so securely positioned in their jobs that they face little threat of being fired or replaced. This can lead to these managers making decisions that benefit themselves personally, rather than the best interests of the firm or its shareholders. Therefore, option D is the best answer. Options A and C are not accurate, as debt holders and equity holders do not necessarily oversee managerial entrenchment. Option B is not necessarily true either, as being well compensated does not necessarily mean that a manager is acting in the best interest of the firm.

Managerial Entrenchment Means That Managers and Run the Firm for Their