Awareness by Top Managers of the Existence of External Investors

question 58

True/False

Awareness by top managers of the existence of external investors in the form of individuals (e.g., Carl Icahn) and groups (e.g., hedge funds) often positively influences them to align their interests with shareholders.

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Definitions:

Tax Due

The amount of tax liability one owes to a tax authority after all calculations are completed.

Wash Sale Rules

IRS regulations that disallow the claim of a loss on the sale of a security if a substantially identical security is purchased within a 30-day period before or after the sale.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.

Like-Kind Exchange

A tax deferral for the exchange of business or investment properties that are of the same nature or character, without cash being involved.