Arnold Is a CEO at Gamma LLC

question 38

Multiple Choice

Arnold is a CEO at Gamma LLC. He has control over the corporate funds of the company. Arnold has often used funds from the company to pay for his travel and hotel expenses. The funds could otherwise have increased stockholder returns. Which of the following concepts is illustrated in this scenario?

• A) Corporate governance
• B) On-the-job consumption
• C) Greenmail
• D) Information asymmetry
• E) Information manipulation

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Definitions:

Cash Dividend

A cash disbursement from a corporation to its shareholders, derived from its earnings.

Par Value

The face value of a bond or stock as stated on the certificate, which is the minimum amount the security can be sold for upon initial offering.

Stated Value

The amount per share assigned by the board of directors to no-par value stock.

Per Share Value

The financial value of a single share of a company's stock, representing a fraction of the corporation's assets and earnings per share.