One Should Be Cautious in the Interpretation, but a Summary

question 57

Multiple Choice

One should be cautious in the interpretation, but a summary of more than a dozen studies analyzing the relationship between organizational social responsibility and economic performance provides what conclusion?

• A) There is a positive relationship between corporate social involvement and economic performance.
• B) Being socially responsible causes good economic performance.
• C) Good economic performance allows firms to be socially responsible.
• D) Corporate social involvement tends to devalue stock prices in the long run.

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Definitions:

Comparative Balance Sheets

Financial statements that present the financial position of an entity at different points in time, side by side, to facilitate comparison.

Dividends

Payments made by a corporation to its shareholder members, distributing a portion of the company's earnings.

Net Income

The amount of money a company retains after subtracting all expenses and taxes from its gross revenue.

Retained Earnings

The portion of net income left over for the business after it has paid out dividends to its shareholders.