Response to the following problem:
Define the following terms:
a. Stockholders who "vote with their feet" versus "active" stockholders
b. Proxy fight; takeover
c. The "wealth effect" of rising (or falling) stock prices
d. Agent; principal; agency relationship
e. Agency cost
f. Basic types of agency conflicts
g. Executive compensation program; Economic Value Added (EVA)
h. Executive stock options
i. Transparent
j. Off-balance sheet financing
k. Conflicts of interest
l. Sarbanes-Oxley Act
m. Real risk-free rate of interest, r*; nominal risk-free rate of interest, rRF
n. Inflation premium (IP); default risk premium (DRP); liquidity premium (LP)
o. Interest rate risk; maturity risk premium (MRP); reinvestment rate risk.