The Executives of a Major Corporation Contribute to Charitable Causes

question 74

Multiple Choice

The executives of a major corporation contribute to charitable causes only when they are certain their gift will be well publicized,their public image will be improved,and ultimately be translated into increased profits.The corporation's charitable acts are most easily explained in terms of

• A)the empathy-altruism hypothesis.
• B)Latan and Darley's decision tree.
• C)social-exchange theory.
• D)the moral exclusion principle.

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Definitions:

Capital Structure

The capital structure is the mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity, which is used to finance its overall operations and growth.

Book Values

The net value of a company's assets, as recorded in its financial statements, minus its liabilities and intangible assets.

Market Value

The estimated amount for which an asset or company could be sold on the open market.

Retention Ratio

The portion of a company's earnings that is not distributed as dividends but is retained by the business for reinvestment.