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Which of the Following is True, if these statements are viewed through the lenses of Agency Problem? I. The managerial compensation contract that links the

  1. Which of the Following is True, if these statements are viewed through the lenses of Agency Problem?

    I. The managerial compensation contract that links the pay with the stock price can encourage managers to take excessively risky projects.

    II. The managerial compensation contract that links the pay with the stock price can encourage managers to take sub-optimally less risky projects.

    II only

    I only

    None of the above

    I and II

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