The Controlling Shareholders Are the Only Managers of the Business

question 59

Multiple Choice

The controlling shareholders are the only managers of the business in which class of corporation?

• A)For-profit corporation
• B)Close corporation
• C)Not-for-profit corporation
• D)Publicly held corporation

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Definitions:

Noncontrolling Interest

A minority stake in a company that is not enough to exert control over its operations, often less than 50% of the voting shares.

Cumulative Dividend

A type of dividend that accumulates if not paid in one period and must be satisfied before dividends can be distributed to common shareholders.

Preferred Stock

A class of ownership in a corporation with a fixed dividend payout, which takes precedence over common stock dividends.

Consolidated Net Income

The total net income of a parent company and its subsidiaries, after intercompany transactions have been eliminated.