CBE (Practice 1)

Hello sir. In this question, I chose statements (2) and (3) because I thought statement (1) should refer to shareholders rather than stakeholders. However, ACCA’s answer includes (1), (2), and (3).

Should I follow ACCA’s approach in the exam or? Could you please give me some advice?

Which of the following statements about Fence Co is/are correct?

(1) Managerial reward schemes of listed companies should encourage the achievement of stakeholder objectives

(2) Requiring investment projects to be evaluated with return on capital employed is an example of dysfunctional behaviour encouraged by performance-related pay

(3) Fence Co has an agency problem as the directors are not acting to maximise the wealth of shareholders