German Executives Are Not Dedicated to the Maximization of Shareholder

question 145

Multiple Choice

German executives are not dedicated to the maximization of shareholder value to the degree that is the case for executives in the UK and United States largely because

• A)the roles of CEO and chairperson of the board of directors are usually combined.
• B)large institutional investors control large blocks of stock.
• C)private shareholders and large institutional investors rarely have large ownership positions in firms.
• D)of the focus on stewardship-management in German firms rather than the financial performance focus of U.S.firms.

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Definitions:

Sarbanes-Oxley Act of 2002

A U.S. federal law that established sweeping auditing and financial regulations for public companies to protect investors from fraudulent financial reporting.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services that have been delivered or used but not yet paid for.

Security

A financial instrument representing an ownership position, a creditor relationship with a governmental body or a corporation, or rights to ownership as represented by an option.