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Which of the Following Is NOT a Reason Why the "Market

Question 29

Multiple Choice

Which of the following is NOT a reason why the "market for corporate control" is the most effective mechanism to give managers the incentive to act like shareholders?


A) The government imposes significant lawsuits and penalties for managers not acting in the best interests of shareholders.
B) The threat of acquisition keeps managers focused on achieving good performance and a high stock price.
C) A low stock price makes a firm a good target for acquisition.
D) It allows the best managers the chance to manage assets.

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