11) Emerging trends resulting from the agency problem are all of the following EXCEPT A) large private corporations. B) restructuring through leveraged buyouts. C) management by active investors. D) prohibiting managers from maintaining an ownership interest. 12) The board of directors is typically responsible for A) developing strategic goals and plans. B) hiring and firing. C) both A and B. D) neither A nor B. 13) The Sarbanes-Oxley Act of 2002 was passed in response to A) insider trading activities. B) false disclosures in financial reporting. C) the decline in technology stocks. D) all of the above. 14) The Sarbanes-Oxley Act of 2002 did all of the following EXCEPT A) tighten audit regulations and controls. B) toughen penalties against overcompensated executives. C) toughen penalties against executives who commit corporate fraud. D) All of the above are true. 15) If a company’s managers are NOT owners of the company then they are A) dealers. B) agents. C) outsiders. D) brokers. 16) The conflict between the goals of a firm’s owners and the goals of its non-owner managers is A) the agency problem. B) incompatibility. C) serious only when profits decline. D) of little importance in most large U.S. firms. 17) The agency problem may result from a manager’s concerns about any of the following EXCEPT A) job security. B) personal wealth. C) corporate goals. D) company-provided perquisites. 18) Agency costs include all of the following EXCEPT A) bonding and structuring expenses. B) cost of goods sold. C) monitoring expenditures. D) opportunity costs. 19) The true owner(s) of the corporation is (are) the A) board of directors. B) chief executive officer. C) stockholders. D) creditors. 20) The ________ has/have the ultimate responsibility in guiding corporate affairs and carrying out policies. A) board of directors B) chief executive officer C) stockholders D) creditors 21) The responsibility for managing day-to-day operations and carrying out corporate policies belongs to the A) board of directors. B) chief executive officer. C) stockholders. D) creditors. 22) In a corporation the members of the board of directors are elected by the A) chief executive officer. B) creditors. C) stockholders. D) employees. 23) Institutional investors are professional investors who work on behalf of the federal government to ensure fairness in the financial markets.
