Takeover bids (and the potential for such bids)
a. increase the incentive of corporate managers to perform efficiently.
b. increase the likelihood that managers will be able to gain at the expense of stockholders.
c. are more likely to occur when a company is producing efficiently and operating profitably.
d. serve no useful economic purpose.
A
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Suppose that Captain Canada can produce 100 hockey sticks or 10 gallons of maple syrup in a typical work week, while Captain Germany can produce 90 hockey sticks or 10 gallons of maple syrup in a typical work week. From these numbers, we can conclude
a. Captain Canada has a comparative advantage in the production of hockey sticks. b. Captain Germany has a comparative advantage in the production of maple syrup. c. Captain Canada has an absolute advantage in the production of hockey sticks. d. All of the above conclusions are correct.
Under what circumstances will inflation help borrowers at the expense of lenders? Under what circumstances will both parties be unaffected? Which scenario would you expect in the long run?