The JAB Gold Mining Company observes that some firms pay their CEOs based on performance relative to
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The JAB Gold Mining Company observes that some firms pay their CEOs based on performance relative to the S&P 500. Most firms, however, have stock prices that are positively correlated with the S&P 500. JAB has a negative beta ! (Its stock returns are negatively correlated with the index.) Does this mean that JAB would be wrong in paying its CEO based on performance relative to the S&P 500? Explain.
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No Relative pay is probably something that JAB should consider There is ...View the full answer
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Related Book For
Managerial Economics and Organizational Architecture
ISBN: 978-0073375823
5th edition
Authors: James Brickley, Jerold Zimmerman, Clifford W. Smith Jr
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