German Executives Are Not Dedicated to the Maximization of Shareholder

question 120

Multiple Choice

German executives are not dedicated to the maximization of shareholder value to the degree that is the case for executives in the UK and U.S largely because

• A) the roles of CEO and chairperson of the board of directors are usually combined.
• B) large institutional investors control large blocks of stock.
• C) private shareholders and large institutional investors rarely have large ownership positions in firms.
• D) of the focus on stewardship-management in German firms rather than the financial performance focus of U.S. firms.

Analyze how special-interest effects and electoral mechanisms influence government policies and resource allocation.

Understand the concept of government failure and its relevance to public choice theory.

Grasp the paradox of voting and its implications for policy-making and societal preferences.

Discern the differences between majority voting outcomes and efficient resource allocation.

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Definitions:

Overapplied Overhead

A situation where the allocated manufacturing overhead costs are more than the actual overhead costs incurred.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company.

Direct Materials Cost

The total expense incurred for the raw materials that are directly utilized in the making of a product.

Work in Process

Inventory category that includes goods that are in the production process but are not yet complete.