(A) one
(B) two or more
(C) company
(D) hundreds of thousands of
The answer is: (A) one
Author: CSS MPT
A corporation is owned by its
(A) management
(B) shareholders
(C) founders
(D) directors
The answer is: (B) shareholders
A publicly listed company usually has ________ of shareholders.
(A) dozens
(B) hundreds
(C) thousands
(D) hundreds of thousands
The answer is: (D) hundreds of thousands
Who is responsible for the administration of a company?
(A) management
(B) shareholders
(C) directors
(D) all stakeholders
The answer is: (A) management
The conflict of interest between shareholders and management is referred to as the
(A) investment decision
(B) financing decision
(C) agency cost
(D) agency problem
The answer is: (D) agency problem
The costs associated with mitigating the agency problem are known as
(A) investment decisions
(B) financing decisions
(C) agency costs
(D) agency problems
The answer is: (C) agency costs
In most large corporations, ownership and management are distinct. What is the primary implication of this separation?
(A) optimal performance
(B) agency problem
(C) separation of management control
(D) optimal efficiency
The answer is: (B) agency problem
A corporation can perform all the following functions except
(A) borrow money
(B) lend money
(C) vote
(D) enter contract
The answer is: (C) vote
The corporate decision regarding capital allocation is referred to as the
(A) investment decision
(B) financing decision
(C) cost of capital
(D) agency problem
The answer is: (A) investment decision
The corporate decision of how to fund its investment projects is termed as
(A) investment decision
(B) financing decision
(C) cost of capital
(D) agency problem
The answer is: (B) financing decision