Methods to minimize agency problem include all except ________________.
A) Offer the managers an equity stake in the firm
B) Award the CEO stock options
C) Allow the CEO to purchase stock via an employee stock option plan
D) Allow the CEO to purchase bonds via an employee bond option plan

Question

Quizplus · Accepted Answer

All other options listed (A,B,C) involve offering managers some form of ownership in the company, which aligns their interests with those of shareholders and can help minimize agency problems. Option D does not involve offering ownership, therefore it does not help to minimize agency problems.

Methods to Minimize Agency Problem Include All Except ________________