Which mechanisms can motivate managers to act in the interest of shareholders?

Which of the following mechanisms is used to motivate managers to act in the interest of shareholders?

A.Bond covenants.
B.The threat of a takeover
C.Pressure from the board of directors
D.Statements a and b are correct
E.Statements b and c are correct

Solution Summary

The solution provides the correct answer and also explains why the other possibilities are not correct.