Which of the Following Is Not a Trend in Corporate

question 27

Multiple Choice

Which of the following is not a trend in corporate governance expected to continue?

• A) Institutional investors are becoming active on boards.
• B) Boards are getting more involved in shaping company strategy.
• C) Boards are getting larger.
• D) Shareholders are demanding directors and top managers own more than token amounts of stock in the corporation.
• E) Outside directors are taking charge of annual CEO evaluations.

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Definitions:

Fixed Costs

Fixed costs are those business expenses that remain constant regardless of the level of production or sales, such as rent, salaries, and insurance.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed to variable costs in a company's cost structure.

Break-even Point

The point at which total revenues equal total costs, resulting in neither profit nor loss.

Variable Cost

Costs that vary depending on the amount of goods produced or the scale of operations in a business.