Which of the Following Are the Views of Stakeholder Theory

question 4

Multiple Choice

Which of the following are the views of stakeholder theory? Please select all that apply.

• A) The key objective is value maximization.
• B) There are multiple objectives to try to benefit all stakeholders.
• C) The key protagonist is Milton Friedman.
• D) The key protagonist is R. E. Freeman.

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Definitions:

Cost of Capital

The rate of return that a company must pay to its capital providers, including both equity and debt holders, for using their capital in the business.

Financing Pressure

The stress or difficulty a company faces in securing funds to finance its operations or expand its business.

Liquidity

The extent to which an asset or security can be quickly bought or sold in the market without affecting its price.

Payback Period

The number of years it takes a firm to recover its project investment. Payback does not capture a project’s entire cash flow stream and is thus not the preferred evaluation method. Note, however, that the payback does measure a project’s liquidity, and hence many firms use it as a risk measure.