Which of the Following Statements About Corporate Decision Making Is

question 43

Multiple Choice

Which of the following statements about corporate decision making is most accurate?

• A)Decisions by directors must be approved by shareholders.
• B)Decisions by directors or shareholders are decisions of the company itself.
• C)Directors are the agents of the shareholders.
• D)Directors have the power to override the decisions of shareholders.

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Definitions:

External Cost

Costs of a transaction or activity that affect people other than those directly involved in the transaction, often not reflected in the market prices.

Social Cost

The total cost to society of an action, including both private costs borne by individuals and external costs absorbed by others.

Gallon

A unit of volume for liquid measure equal to four quarts, used in the United States and the United Kingdom.

Equilibrium Quantity

The quantity of goods or services supplied is equal to the quantity demanded at the market price.