Which of the Following Actions Is Best for Parents to Decrease

question 55

Multiple Choice

Which of the following actions is best for parents to decrease succession conflict among children active in the firm and those who are not?

• A) Let those not involved in the company have a larger portion of an inheritance outside of the company, and allow those involved in daily operations have more ownership of the business.
• B) Let the next generation reach a consensus about management of the company.
• C) Change the ownership of the company so common (voting) stock is only given to those active in the firm's management and others receive preferred (nonvoting) stock.
• D) Make decisions based on tax considerations, not what is best for the next generation or the business.

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Definitions:

Corporate Level

Pertaining to high-level decision-making and strategy formulation in a business organization, often involving executives and board members.

Strategy

An elevated strategy purposed to accomplish one or several objectives amidst uncertain circumstances.

Board of Directors

A group of individuals elected by shareholders to oversee the activities and governance of a corporation, ensuring it's run properly and profitably.

Corporate Level

The corporate level refers to the highest level of organizational strategy and decision making, often pertaining to the entire enterprise rather than specific divisions or products.