Which of the Following Are Advantages Claimed for the Shareholder

question 47

Multiple Choice

Which of the following are advantages claimed for the shareholder model of governance? Choose all that apply.

• A) It makes it easier for management to make objective strategic decisions.
• B) It reduces the risk of short- termism.
• C) Investors get a higher rate of return.
• D) It encourages economic growth and entrepreneurship.

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Definitions:

Invested Assets

Assets in which money has been spent to acquire or improve, intended to generate income or profit.

Income From Operations

The profit realized from a business's core operations, excluding costs and expenses related to financing and investments.

Residual Income

The income that remains after subtracting all required costs of capital from operating profit, a measure of profitability.

Activity Base

A measure used to allocate costs in activity-based costing, reflecting the level of effort or consumption of resources.