Which of the following encourages managers to act in the shareholders' interests?

Question

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Performance based compensation incentivizes managers to work towards achieving the company's goals and increasing shareholder value. Audits ensure that the company's financial statements are accurate, reducing the likelihood of fraudulent activities that harm shareholders. The threat of hostile takeovers encourages managers to perform well to prevent the company from being taken over by a competitor, which could result in job loss or other negative consequences for the management team. All of these factors encourage managers to act in the best interests of shareholders.

Which of the Following Encourages Managers to Act in the Shareholders