Abdul, a Student of Business Management, Claims That the Stakeholder

question 44

Multiple Choice

Abdul, a student of business management, claims that the stakeholder model is not a good model of business management. Which of the following would he most likely cite as a reason for his claim?

• A)The shareholders are not the legal owners of the corporation's assets.
• B)Managers need to focus on the only objective of increasing shareholder value.
• C)The stakeholder groups should be considered in decisions that will impact them.
• D)Managers spend most of their time interacting with stakeholders.

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Definitions:

Effective-Interest Method

A way of calculating the amortized cost of a bond and the amount of interest expense over time.

Interest Payment Dates

Specific dates set in a loan agreement or bond indenture on which interest payments are made to lenders or bondholders.

Operating Lease

A leasing agreement allowing the use of an asset without ownership, typically with shorter terms than the asset's life, and where the lessor retains the risks and benefits of ownership.

Capital Lease

A lease classified as a purchase by the lessee, where the asset is accounted for on the lessee’s balance sheet as an asset.