Which of the Following Is True of the Board of Directors

question 83

Multiple Choice

Which of the following is true of the board of directors in a public stock company?

• A) Votes at shareholder meetings determine whose representatives are appointed to the board of directors.
• B) Because shareholders generally have uniform interests, the composition of the board is generally a unanimous decision.
• C) The board of directors acts as a facilitator to convey interests of the stockholders to the management without any real authority.
• D) The functions of the board of directors are limited to ensuring the hiring and firing of CEOs.

---

Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency.

Inventory Turnover

A ratio showing how many times a company sells and replaces its stock of goods within a certain period.

Common Stockholders' Equity

The portion of equity ownership in a corporation held by common stock investors, reflecting their claim on the company's assets.

Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets to generate sales revenue.