Which of the Following Statements Regarding Stakeholder Theory Is Incorrect

question 18

Multiple Choice

Which of the following statements regarding stakeholder theory is incorrect?

• A)it dispenses with the assumption that the sole important relationship is between agents (managers)and principals (shareholders)
• B)it considers the corporation from a much broader perspective,whereby shareholders are only one of many potential stakeholder groups
• C)to ignore society is to threaten the equilibrium that it provides
• D)it assumes that the sole important relationship is between agents (managers)and principals (shareholders)

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Definitions:

Oral Contracts

Agreements between parties that are made verbally and not memorialized in writing, yet are still legally binding in many cases.

Reformation

A court-ordered correction of a written contract so that it reflects the true intentions of the parties.

Erroneous Legal Description

A mistake or inaccuracy in the written account of the boundaries or details of a property in legal documents.

Sale of Land

The transfer of ownership of a parcel of real estate from one party to another, typically through a legal process.