Explain how an agent’s desire to maintain the ongoing value of a good reputation can facilitate shareholder monitoring of the agent.

A. employees with good reputations are able to demand more compensation for their work

b. employees who are caught misbehaving risk losing that higher compensation for their work

C. reputation facilitates shareholder monitoring because employees are less likely to misbehave if the cost of getting caught and losing their reputation is high

D. desire to maintain a good reputation does not facilitate shareholder monitoring

A and B

A and C

A and D

B and C

B and D

C and D

all but A

all but B

all but C

all but D

all are true