Which of the Following Is a Characteristic of the Shareholder

question 19

Multiple Choice

Which of the following is a characteristic of the shareholder primacy model?

• A)It was advocated by Professor Merrick Dodd.
• B)It holds that shareholders have a special type of contract with a corporation.
• C)It holds that no group should enjoy primacy in decision making.
• D)It is based on the belief that a corporation should be run for the benefit of the entire community.

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Definitions:

Fixed Costs

Business expenses that remain unchanged regardless of the level of production or sales activities, such as rent, salaries, and insurance.

Breakeven Volume

The quantity of output or sales at which total revenues equal total costs, resulting in no profit or loss.

Sales Revenues

The total amount of money generated from sales of goods or services by a company before any expenses are subtracted.

Contribution Margin

The difference between sales revenue and variable costs, used to cover fixed costs and generate profit.