Research Suggests That the Activism of Institutional Investors Such as TIAA-CREF

question 119

Multiple Choice

Research suggests that the activism of institutional investors such as TIAA-CREF and CalPERS

• A)increases shareholder value significantly.
• B)may not have a direct effect on firm performance.
• C)is so aggressive that boards of directors have become overly cautious.
• D)has weakened the effect of other governance mechanisms.

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Definitions:

Contribution Margin

The difference between the sales revenue and variable costs of a product, showing how much revenue contributes towards covering fixed costs and generating profit.

Avoidable Costs

Expenses that can be eliminated if a particular decision is made or if an activity is ceased.

Sunk Costs

Costs that have already been incurred and cannot be recovered, and should not affect future business decisions.

Irrelevant Costs

Costs that will not be affected by a decision and should not be considered when making that decision.