Managerial entrenchment means that managers ________ and run the firm for their own best interests.
A)are overseen by debt holders
B)are overseen by equity holders
C)are well compensated
D)may face little threat of being fired

Question

Quizplus · Accepted Answer

Managerial entrenchment refers to the situation where managers may face little threat of being fired. This can lead to them running the firm for their own best interests, rather than prioritizing shareholders or other stakeholders. Therefore, option D is the best choice as it directly addresses the concept of managerial entrenchment. Options A, B, and C are not as directly related to the concept of managerial entrenchment, although they may be relevant in other contexts.

Managerial Entrenchment Means That Managers ________ and Run the Firm