At a Meeting of Major Stock Holders a Decision Is

question 56

Multiple Choice

At a meeting of major stock holders a decision is made to finance expansion to overseas markets by issuing more shares and not taking a long-term note with the company's bank.One of the stock holders opposed this decision but was out-voted.Why would this stock holder oppose this decision?

• A) Issuing shares will increase the likelihood of decreasing the owners return on investment.
• B) The financial risk would be lower if the note was taken out with the bank.
• C) More shares will increase their control but increase their personal taxes.
• D) Each of the shareholders would have to increase their own investment.

---

Definitions:

Minimize Exposure

Taking steps to limit one's contact with potentially hazardous substances or situations to reduce risk of harm.

Negative Outcomes

Undesirable or harmful results or effects stemming from an action, decision, or situation.

Quality Procedures

Standardized methods and practices designed to ensure that products or services meet prescribed standards of quality.

Petty Cash Fund

A small amount of cash on hand used for covering minor expenses in an organization.