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The phrase Incentives are not aligned means: The rules and compensation in a firm encourage behavior contrary to what the firm is trying to achieve
The phrase "Incentives are not aligned" means: The rules and compensation in a firm encourage behavior contrary to what the firm is trying to achieve O Managers rely too heavily on decision-making heuristics O Ownership and management of the firm are separate (i.e., the owner does not manage the firm) O The strategy of the acquiring and target firms in an acquisition are completely differentCrony Capital Inc. has unwittingly hired an unethical CEO, Boris Badenov. Mr. Badenov knows that his unethical practices are enriching himself rather than his company, and that this makes his firm a potential target for acquisitions. To prevent a hostile takeover, he has inserted language in the company's charter that will automatically issue new shares, diluting the value of existing shares, if any one shareholder acquires too large of a stake in the company. This is called a: O Golden parachute O Poison pill Greenmail strategy O Water down strategy O None of theseis an example of one type of agency costs. O Monitoring costs O Opportunity costs O Operating costs O Strategic costsWhich of the following benefits derived from diversification of a firm's product line benefit the decision-making specialists but not the risk-bearing specialists? O It reduces managerial employment risk O It can potentially increase a firm's returns O It enhances a firm's strategic competitiveness O It leads to better implementation of corporate governance policies
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