Stock options perfectly align management incentives with incentives of owners
Indicate whether the statement is true or false
F The alignment of incentives is not perfect. Owners usually have large investments committed to the firm, and are concerned about protecting them. Management stock options represent no such commitment, and managers gain only from an increase in stock value that will enable them to sell their options and gain the amount of the stock increase. The management incentive from stock options therefore focuses on increasing stock value, not preserving stock value.
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Refer to Figure 3.4. Serena's dominant strategy is to play ________ and Austin's dominant strategy is to play ________
A) North; North B) South; South C) North; South D) Neither Serena nor Austin has a dominant strategy.
Which type of tariff is forbidden in the United States on Constitutional grounds?
A) import tariff B) export tariff C) specific tariff D) prohibitive tariff E) import quota