Managers Are Sometimes Able to Pursue Their Own Interests at the Expense

question 59

Multiple Choice

Managers are sometimes able to pursue their own interests at the expense of other stakeholders because managers:

• A)have the ability to initiate a takeover.
• B)are the most powerful outside stakeholders.
• C)own the organization.
• D)have control over organizational resources.

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, often with fixed dividends.

Trading Securities

These are debt or equity securities that are purchased primarily for selling in the near term with the intent of generating short-term profits.

Held-to-maturity Securities

Debt securities which a company has the positive intent and ability to hold until maturity.

Debt Securities

Financial instruments representing money borrowed that must be repaid, typically with interest, such as bonds, bills, or notes.