The Moral Case for Why a Company Should Actively Promote

question 30

Multiple Choice

The moral case for why a company should actively promote the betterment of society and act in a manner benefiting all its stakeholders

• A)is based on the principle of treating people fairly and with respect.
• B)is based on the conviction that improving the well-being of society ranks higher in priority and is certainly nobler than making a profit and serving the interests of shareholders.
• C)boils down to "it's the right thing to do."
• D)rests on the principle that a business is duty bound to fulfill its social contract to serve the interests of all stakeholders in a business enterprise.
• E)is based on the principle that business activities lack real legitimacy and have few socially redeeming qualities unless and until a company exerts a significant and sincere effort to give something back to the community.

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Definitions:

Financial Distress

A situation where a company cannot meet or has difficulty paying off its financial obligations to its creditors.

Cash Dividend

A distribution of profits by a corporation to its shareholders in the form of cash.

NPV Projects

Net Present Value Projects; a method used to evaluate the profitability of an investment or project by calculating the present value of all cash flows associated with it.

Residual Policy

A dividend policy where dividends are paid out from residual or leftover earnings after all productive investment opportunities are funded.