With Regard to the Visible or Hidden Issue, Most Executives

question 10

Multiple Choice

With regard to the visible or hidden issue, most executives agree that

• A) the SEC should regulate whether or not companies make their strategic information visible.
• B) some strategic information should remain confidential to top managers.
• C) a company has gone too far when it takes steps to ensure that strategic information is not disseminated beyond "the inner circle."
• D) the potential benefit of improved employee and stakeholder motivation and input is not worth the risk of rival firms easily knowing and exploiting a firm's strategies.
• E) keeping strategies secret from employees and stakeholder will likely improve communication, understanding, and commitment.

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Definitions:

Interest on Interest

The interest earned on the reinvestment of previous interest payments, commonly associated with compounding interest.

Reinvestment

The process of using dividends, interest, or any form of return earnings to purchase additional shares or units instead of receiving the earnings in cash.

Compound Interest

This refers to the interest that is calculated on both the original principal amount and on the interest that has previously been added to that principal in past periods.

Initial Principal

The original sum of money borrowed in a loan or invested, before any interest or profit is added.