Free CIMAPRA17-BA1-1 Exam braindumps download (CIMAPRA17-BA1-1 exam dumps Free)

Which ONE of the following statements about the 'divorce of control from ownership' is true?

If an organization is controlled by managers, profit will no longer be an objective for business organizations
Issues of corporate governance would not arise if shareholders had effective control of business organizations
Remuneration schemes for directors which are linked to share prices encourage the divorce of control from ownership
Managerial objectives are likely to be related to the size and growth of the organization rather than shareholder value

Answer(s): D

Which ONE of the following statements best defines the principal-agent problem in a company?

A lack of consultation of shareholders by directors
Personal goals are pursued by directors that are inconsistent with the welfare of shareholders
Shareholders don't always know what management is doing
Directors get paid too much for the job they do

Answer(s): B

Which ONE of the following is NOT a symptom of the principal-agent problem in company XYZ?

The pay of the directors of XYZ is not related to the company's financial performance
XYZ loses money following a risky investment in a new line of business
The family of the Chief Executive of XYZ use the company jet for shopping trips
XYZ's Board conceals information about losses from shareholders

Answer(s): B

The principal - agent problem is most likely to occur

Answer(s): C

Which of the following statements most accurately describes the role of an agent as defined in principal-agent theory?

An employee of the organization
An owner of the organization
One who is paid by the owners of the organization
One who is responsible for ensuring the organization pursues the interests of its owners

Answer(s): D

Free CIMAPRA17-BA1-1 Exam Braindumps BA1 - Fundamentals of Business Economics Questions 106–110 (page: 23)