Question 1

The takeover constraint refers to the

Accepted Answer

The takeover constraint refers to the risk of being acquired by another company. It is a constraint that limits a company's actions and decision making in order to avoid becoming an attractive target for acquisition. By being mindful of this constraint, a company is more likely to remain independent and in control of its operations.

Question 2

CEO compensation packages are most frequently criticized because of their

Accepted Answer

CEO compensation packages are often criticized for not being aligned with company performance. Many executives receive large bonuses and stock options, even when their companies do not perform well. This lack of correlation can be frustrating for shareholders, who may feel that top executives are being rewarded for poor performance.

Question 3

Ethics may best be thought of as

Accepted Answer

Ethics are standards of right and wrong. While ethics may overlap with legal prescriptions or cultural mores, they are not limited to those frameworks. Ethics are not necessarily unattainable, as individuals can strive to behave in accordance with ethical principles.

Question 4

Thinking of it in its simplest terms,the balanced scorecard approach may be viewed as the

Accepted Answer

The balanced scorecard approach is a tool for measuring and managing strategy, with a focus on multiple perspectives such as financial, customer, internal processes, and learning and growth. The dials and indicators in an airplane cockpit are also designed to provide a comprehensive view of multiple factors that are critical for safe and efficient flight, making it the best choice for analogy.

Question 5

Business ethics are concerned with accepted principles of right or wrong governing the conduct of businesspeople.Identify and discuss the common examples of unethical decisions that businesspeople have made.

Accepted Answer

The answer of Business ethics are concerned with accepted principles...

Question 6

Explain the principles of agency theory,including the issues it addresses.What are some effective ways to deal with agency problems,as implied or stated by agency theory?

Accepted Answer

The answer of Explain the principles of agency theory,including the...

Question 7

Becca is a CEO at XYZ Company.She has recently invested corporate funds to take an exotic trip to the Cayman Islands.This is an example of which of the following?

Accepted Answer

The answer of Becca is a CEO at XYZ Company.She...

Question 8

A typical board of directors is composed of

Accepted Answer

A typical board of directors is composed of both inside and outside directors. Inside directors are typically executives or managers from the company, while outside directors are independent and not employed by the company. This mix helps provide a balanced perspective on the company's decisions and governance.

Question 9

A stock option is a right to buy

Accepted Answer

A stock option is a contract between an employee and their employer that grants the employee the right to purchase a specific number of shares of the company's stock at a predetermined price (known as the exercise price) within a certain time period. This predetermined price is usually lower than the current market price at the time the option is granted, allowing the employee to potentially profit from the difference if the stock price goes up. So, the correct option is C, shares of the company's stock at a predetermined price at some point in the future.

Question 10

Sarbanes-Oxley,federal legislation enacted in 2002,requires

Accepted Answer

Sarbanes-Oxley requires CEOs and CFOs to endorse their company's financial statements. This endorsement, also known as certification, indicates that the financial statements are accurate and complete to the best of their knowledge. The certification requirement is designed to increase accountability and transparency in financial reporting and to protect investors from fraudulent financial practices.

Question 11

Consider a national chain of company-owned fast-food restaurants.For this firm,list the important stakeholders.Then describe how each stakeholder group can affect the firm's profitability.

Accepted Answer

The answer of Consider a national chain of company-owned fast-food...

Question 12

Identify and discuss the governance mechanisms that help align the incentives of stockholders and managers and help monitor and control management.

Accepted Answer

The answer of Identify and discuss the governance mechanisms that...

Question 13

Nicole is a salesperson at a local Ford dealership.Her bonus pay is dependent upon surpassing sales targets,thus increasing the profitability of the company.This is a form of which of the following governance mechanisms?

Accepted Answer

The scenario describes the use of employee incentives, where the salesperson's bonus pay is tied to sales targets, resulting in increased profitability for the company. This is a form of governance mechanism that incentivizes employees to act in the interest of the company. The other answer choices do not accurately reflect the scenario described.

Quiz 11: Corporate Performance, Governance, and Business Ethics